House approves new Oil Company taxes

[SoFlaJDM]

Originally Posted by JaJae

You don't need to be an IRS auditor. My stepfather was, but in all honesty his opinion doesn't really matter. All you need is a basic sense of managing a business to realize that if the entire market is hit with a tax the reaction is to pass it on. The profits of the oil companies will not decline one bit from this tax. Whatever their tax is will get passed on fully to the consumer. That's how business and our economy works.

The Democrats might as well have just made the tax an income tax rather than hitting up poor families trying to heat their homes this winter. Just my personal take on it.

nice anecdote, but that doesn't really tell me what today's oil companies do with their profits

[JaJae]

Originally Posted by SoFlaJDM

nice anecdote, but that doesn't really tell me what today's oil companies do with their profits

Who cares what they do with their profits? What does that have to do with you or me? Taxing them for any reason isn't making them pay for whatever the tax is going towards. It's making US pay for whatever the tax is going towards.

Taxes on businesses work the same as any other increased cost. It gets passed on to the consumer. For example, if I sell cardboard boxes for $2 each and my supplier sells them to me for $1 each I make a $1 profit. If now the government decides to add a $.50 tax on cardboard boxes to save the environment I am not going to continue selling my boxes for $2 each. I would raise the price to either $2.50 or EVEN higher and use the government as an excuse. Because now the market is unstable and there is a risk in doing business in that market not knowing what the government will do to screw me over.

This tax on oil effects more than the gas pump. It effects heating homes, electricity, transportation, shipping, etc.

[hsmith]

it is ok, we can afford to pay more at the pump, right?

[hsmith]

Originally Posted by SoFlaJDM

nice anecdote, but that doesn't really tell me what today's oil companies do with their profits

they get all the money in $100 bills and BURN them

[hsmith]

lol @ simplistic view of economics

all the money the oil companies make is put back into the economy

but, oh lets put it in the gov't so we have more money to waste

[Publius]

Originally Posted by SoFlaJDM

i'd really like to believe you, but unless you're some kind of IRS auditor, i just can't/won't

You don't need to be an IRS auditor, a basic understanding of economics and business suffices in making it obvious.

But I guess your idea of oil barons swimming around in olympic-sized pools full of $100 bills is better. It feels right to you.

[WickedLou9]

Originally Posted by hsmith

lol @ simplistic view of economics

all the money the oil companies make is put back into the economy

but, oh lets put it in the gov't so we have more money to waste

Well in all fairness, the government takes the money and spends it too, so it's not like they are burning it either. they spend it on defense, or on building roads or social security... in all cases the money still goes back into the economy, it just that where the money goes will change. Instead of being spent on oil barges or multi-million dollar CEO bonuses, it's spent on tanks or on medicare or something

[JaJae]

Originally Posted by WickedLou9

Instead of being spent on oil barges or multi-million dollar CEO bonuses, it's spent on tanks or on medicare or something

This will have no effect on CEO bonuses or whatever else they would do with their profits.

[Ardentfrost]

Originally Posted by WickedLou9

Well in all fairness, the government takes the money and spends it too, so it's not like they are burning it either. they spend it on defense, or on building roads or social security... in all cases the money still goes back into the economy, it just that where the money goes will change.

Broken Window Fallacy Alert!

If the gov't needs to take our money to help out some industry or buy something that we aren't doing/buying on our own, then we don't need that thing. That favoritism based on human emotion instead of true societal need only works against the things that we DO need.

[Ardentfrost]

Originally Posted by Publius

But I guess your idea of oil barons swimming around in olympic-sized pools full of $100 bills is better. It feels right to you.

[nbiggershaft]

Originally Posted by Publius

When an industry is given a government sanctioned oligopoly like they have been,

Originally Posted by Ardentfrost

That's true except where there's a gov't sanctioned monopoly/oligarchy.

go on

[Ardentfrost]

Originally Posted by nbiggershaft

go on

that's twice you've said that, and it's the most ambivalent statement in the damn thread. wtf do you want? Proof that the oil companies are helped out by the gov't? proof that they'll just pass the buck onto the consumer? what?

[hsmith]

Originally Posted by WickedLou9

Well in all fairness, the government takes the money and spends it too, so it's not like they are burning it either. they spend it on defense, or on building roads or social security... in all cases the money still goes back into the economy, it just that where the money goes will change. Instead of being spent on oil barges or multi-million dollar CEO bonuses, it's spent on tanks or on medicare or something

taxation removes spendable income from all of society and spends it is specific locations. it is detrimental to all of society

i'd rather them first stop giving all these tax benefits TO oil companies

[nbiggershaft]

Originally Posted by Ardentfrost

that's twice you've said that, and it's the most ambivalent statement in the damn thread. wtf do you want? Proof that the oil companies are helped out by the gov't? proof that they'll just pass the buck onto the consumer? what?

The former, that oil companies have a monopoly created by the government. You guys tend to make statements such like this about just about every industry, that the government is causing whatever possible problem, and usually it comes with very little backing. Just the idea that the government must be the root. In the end if anyone asks how, usually the only response recieved is some obscur story found with google that the poster didn't even know about before he was questioned.

[WickedLou9]

Originally Posted by Ardentfrost

Broken Window Fallacy Alert!

If the gov't needs to take our money to help out some industry or buy something that we aren't doing/buying on our own, then we don't need that thing. That favoritism based on human emotion instead of true societal need only works against the things that we DO need.

I don't agree. You are operating under the premise that profit makes right. Whatever activity allows for the greatest production of profit must therefore be the best activity for everyone. Sometimes the thing that results in the highest profit is not in the interest of society. The emotion of greed, if you want to call it that, is often times what leads to profit driven behoavior, and not the best interest of society. You assume that the oil companies are charging what they are charging because it's the best price for everyone involved. It's not, it's the best price for them and them alone. BEcause the oil market is inelasitic in regards to price ( to a large extent), the oil companies have much greater leverage in charging more than the consumer really wants to spend. The consumer is a hostage market. We all need oil.
Making oil even MORE expensive might actually be in the best interest of society in the long term. We know oil is going to run out eventually. Waiting for the supply to actually begin shrinking to drive up prices is not the best solution. artificially raising the price of oil forces innovation into alternate energy ahead of the curve so to speak, and when the actual shortage does arrive, we will feel little or no pain because we have already switched over to some other alternative.
In the mean time, those oil profits have been shifted to other areas that are actually beneficial to greater society.

[DosEquis]

Originally Posted by JaJae

Who cares what they do with their profits? What does that have to do with you or me? Taxing them for any reason isn't making them pay for whatever the tax is going towards. It's making US pay for whatever the tax is going towards.

Taxes on businesses work the same as any other increased cost. It gets passed on to the consumer. For example, if I sell cardboard boxes for $2 each and my supplier sells them to me for $1 each I make a $1 profit. If now the government decides to add a $.50 tax on cardboard boxes to save the environment I am not going to continue selling my boxes for $2 each. I would raise the price to either $2.50 or EVEN higher and use the government as an excuse. Because now the market is unstable and there is a risk in doing business in that market not knowing what the government will do to screw me over.

This tax on oil effects more than the gas pump. It effects heating homes, electricity, transportation, shipping, etc.

No, it won't work that way. Just as an example because my dad owns 2 of them... Recently in nebraska they decided that self service carwashes were subject to sales tax of 7%. They can't raise the price to compensate because people will stay home. Those business owners are already charging what the market will support. If they charge more people will wash in the driveway. If they raise the price of the wash they would be limiting their customer base. Instead of taking a hit in volume of customers, it is cheaper to take the 7% sales tax hit, so they leave their price at $1.75-$2.00 for 4 minutes.

Same thing goes with the price of gas. What happens when we run short on supply? They raise the price to slow down the demand. Since it is something we depend on they have a little more room to work with than your basic self service carwash, however, they can only do so much before it is not beneficial to their business. As the price goes up they limit their customer base. It may be cheaper for them to just eat the tax increase, or part of the tax increase.

This is what will happen. The price will remain relatively stable. Maybe increase by $0.05. That will be our "burden" as society. They will utilize some, if not most, of the loop holes in this new bill such as investing that money in alternative energy...probably what they were going to do with some of that money anyway. Then whatever they can't write off, and whatever is left over after our new "massive burden" on society, they will just eat it. They will still have 10's of billions in profit and the day will go on.

[JaJae]

Originally Posted by DosEquis

If they charge more people will wash in the driveway.

People can't exactly drill for their own oil though. And the example of your father's business is not the norm.

[Ardentfrost]

Originally Posted by nbiggershaft

The former, that oil companies have a monopoly created by the government. You guys tend to make statements such like this about just about every industry, that the government is causing whatever possible problem, and usually it comes with very little backing. Just the idea that the government must be the root. In the end if anyone asks how, usually the only response recieved is some obscur story found with google that the poster didn't even know about before he was questioned.

I don't know what specifically you want... like the tax breaks the big 7 got for years that others didn't? The energy lobby that is run by them that pockets a LOT (like, almost all) of politicians? Allowing us to be controlled by OPEC?

Do you think we NEED OPEC's resources as much as we use them? We have lots of oil in our country we could be using as bargaining chips to drive OPEC's prices lower, but we don't... because "Big Oil" or the "SuperSeven" or whatever you want to call them is supported by our government to let THEM be the importers of oil. By doing so, they are (forceably) the only providers of oil to Americans. We do VERY little with our own oil.

Start yourself up a gas station and try to buy oil on your own and see what happens.

[Nonphixion]

Originally Posted by 7th Ninjai

Great - another tax passed onto Americans under the guise that the Democrats are trying to do something for the common good. Disgusting.

These are not new taxes, but $16 billion dollars in Tax Credits for Big Oil, that saved them those billions per year have been removed by the Democrats.

If nothing were to have changed here in the House, Big Oil would still be saving $16,000,000,000.00 each year, that they are normally supposed to be paying under previous and standing tax code.