UMD Libertarians

So he is going to steal money from the Oil Companies and hand it over to citizens, what a fucking communist.

Fuck that worthless shitbag and anyone who votes for him.
Let me preface this by saying I’m not an economist nor do I pretend to be one…

What exactly is a windfall profit and what industries will this effect?
mccain " 2013 iraq war has be won, us is doing great, and I have a huge dildo up my ass"

It means that the oil companies made more money than normal, so the government will take it. It will make oil prices (or oil product prices) rise.

no it fucking doesn’t
Well, that should work out well. Businesses don’t tend to pass on their cost of doing business to the consumer

just so long as the poor people get their free handout, they dont care

I’m content with that plan ..

it was started by President Carter during the oil embargo as a way to take away profits from oil companies. When the government decides the oil companies are making too much money they take it away

My blood… it is boiling.

Ok, I understand that…but aren’t there other industries that have ‘windfall profits’ I can kinda think the movie industry if that’s the only qualifying factor is making more money than ‘normal’…
Bottom line: McCain Sucks in many ways, Obama Sucks in many ways

Bottom bottom line: Fuck the 2 party system

as long as it’s those evil oil companies and not your business amirite?

Except they don’t even get that. They’ll be paying it all back next year. It’s a shell game to make it look like the big black jesus is giving them free monies.

I like the way you think…except for the whole football thing

Movies aren’t a big sensational news item right now.

Ok, so it has to be headline grabbing and has to make more money than normal to get a ‘windfall profit’ tag…basicly sounds like a bunch of bullshit

God forbid we discuss politics in an active forum while campainging for presidential elections is going on.

any profits that democrats don’t like, basically.

Oh it will, will it?

It’s called a windfall tax for a reason. Outside events have caused the profits to jump for these companies and they are sitting on HUGE cash reserves. They were making enormous amounts of money before scarcity started becoming a factor, so in fact such a tax will NOT drive up prices directly.

That said, I disagree with a tax plan like Obama’s and he really needs to get some economists that have more long term plans, because he is NOT an economist and needs to stop playing one.

Better than McCain though.

no, democrats like movies.
So he lets the uneducated public think he’s doing us a good deed but giving us more money, but in reality, big oil is only going to mark up their prices to off set what the governemnt is taking away from them to put in our pockets.

This is politics folks, anything to get votes.

all the more reason to not do it, we should just make Obama our ambassador to the EU. That will make everyone happy

and gas costs like $10/gallon there hmmm

you don’t know anything about economics

if it’s a tax on profits it shouldn’t affect the price of gas.

feel free to go on talking bullshit though.
How have you not known about this? This has been central to his campaign since 2007.

… and what exactly is that supposed to prove?

I wanted to have some fun in the main forum but it was moved

You may have had a valid point, but that’s all I could get out of it.

Oh, I was about to say, the man has been saying this for over a year now.

If the gas companies have enough pricing power to adjust the prices to increase their profits, why aren’t they doing it now?

Because they either don’t have enough pricing power to adjust the prices (not likely) or because they’re already charging the amount which leads to the highest profits (likely).

So taking a percentage of that profit doesn’t leave them with anything to do to increase profits further.

really? you think so? I don’t see why they couldn’t simply scale up the prices a tad more to compensate for additional taxes

Like I’ve said I’m not an economist, I don’t pretend to be one, but what is to stop the oil companies from doing just what they shouldn’t do?

ie

We had 10 million in profits this last quarter were taxed 25% on our net profit, so to make up for that we’re going to charge XX% higher for the next quarter?

Where does this windfall profit stuff end? Or is it just with oil companies? Excuse my ignorance I’m truly curious about just how this is supposed to work…

Basically the profit margin that the oil companies use has stayed the same while the scarcity of oil has cause the price to rise. This means that they are making more now than they were before, because the demand is still so high. A windfall tax simply shaves more off the top to make up for that.

as for "just with the oil companies"

no, any unpopular industry gets to bear unfair tax burdens. Ask big tobacco how they feel. Oil companies have fucked this country in a lot of ways, so maybe that’s a justification to have, but seriously, it’s a different discussion than the economic effects of the tax.

As for the price raise, as I pointed out before, if the oil companies can raise their prices to increase their profit, why aren’t they doing it now, before any tax? Are they charities?

But why even do it?

Ok I can understand that. But what I’m asking is, where does this ‘windfall profit tax’ stop? With oil companies?

The easiest example I can come up with… XX movie studio makes a movie for 20million….it’s a huge blockbuster and makes (over let’s say a 8 week run) around 350-400 million. Would that be considered a ‘windfall profit’ enough to be taxed more off the top?

the point is that tax is likely going to raise them now that there is a legit reason

Low income families are having a tough time and big oil is an easy target.

No, because that is what every movie company wants to have happen. The way the oil companies are bringing in more profit was totally unexpected and has nothing to do with their own actions. Hence the name windfall.

Oh, same shit different day.
This may be the worst idea I have ever heard.
As if gasoline wasn’t expensive enough….

This could do it. This could put us in a true depression.

I was talking to my Father yesterday and he is actually counseling me against buying a house and renting.

I told him that the houseing crunch has to let up soon. I said maybe another year, but much more then that and this country is going to be in terrible shape. I fear we are close to a full-on depression.

When I saw what Obama wanted to do it made me think, it isn’t just the housing that is the problem. Oil prices are out of control too.
We could be fucked from either direction.

Look, your position is logically unsustainable.

If the oil companies can earn more profits by charging higher prices, why are they not doing it now?

If the oil companies are already earning as much profit as they possibly could, why would the raise the price after a tax and lower their profits?

There’s nothing really interesting about this topic. I don’t like it, but these oil execs are pieces of shit. I’m trying to find a couple video interviews with the Chevron CEO where, when questioned about their huge cash reserves and profits, all he does is mumble about saving for research and how he supports McCain. They love the status quo.

Now granted they’re making money. Can’t deny it. The way I am grasping this (and admittedly I could very well be WAY off base) the stuff going on now with energy prices, is that they keep pushing that line up till we (the citizens) get really pissed off then back off to give us a bone here and there…before fucking us again…

I don’t honestly see where this type of a tax will have a positive impact on the consumer. Unless something is enacted on the windfall profit that inserts extremely heavy regulation or nationalization of the entire oil industry…

But I’ve said it before I’m not an economist, but I can fix damn near anything that has electricity running through it
wow dont honeslty know what to think my first reaction is wtf how stuiped is that due to my personal belief they are going to raise taxs but then i must admit my own lack of expertise in the subject and must blindly trust that he is smarter than everyone else…. which still doesnt sit exactly right

not to mention the way they fund all the "scientists" (math or biology PHDs) doing "research" on how global warming doesn’t exist.

and all the foreign wars in oil-rich countries.

well basically what they’re doing is putting their hands into the take-home profits of the oil companies and then distributing it to low-income families that are hardest hit by the huge spikes in energy costs.

it is redistribution, but it shouldn’t affect the price.

it will act their stock price, correct?

I don’t want to encourage Congress to abuse it’s tax power more than it already does.

That’s exactly the issue people have with this idea. Does it really help long term?

However, at least Obama has a SOURCE for the money he plans on giving people. That’s more than can be said about most stimulus packages.

Interesting I’ll keep an eye on it
WASHINGTON — Senate Republicans blocked a proposal Tuesday to tax the windfall profits of the largest oil companies, despite pleas by Democratic leaders to use the measure to address America’s anger over $4 a gallon gasoline.
The Democratic energy package would have imposed a tax on any "unreasonable" profits of the five largest U.S. oil companies and given the federal government more power to address oil market speculation that the bill’s supporters argue has added to the crude oil price surge.
"Americans are furious about what’s going on," declared Sen. Byron Dorgan, D-N.D., and want Congress to do something about oil company profits and "an orgy of speculation" on oil markets.
But Republicans argued the Democratic proposal focusing on new oil industry taxes is not the answer to the country’s energy problems.
"The American people are clamoring for relief at the pump," said Sen. Pete Domenici, R-N.M., but if taxes are increased on the oil companies "they will get exactly what they don’t want. The bill will raise taxes, increase imports."
The Democrats failed, 51-43, to get the 60 votes needed to overcome a GOP filibuster and bring the energy package up for consideration.
Separately, Democrats also failed to get Republican support for a proposal to extend tax breaks for wind, solar and other alternative energy development, and for the promotion of energy efficiency and conservation. The tax breaks have either expired or are scheduled to end this year.
The tax provisions were included in a broader $50 billion tax measure blocked by a GOP filibuster threat. A vote to take up the measure was 50-44, short of the 60 votes needed.
The windfall profits bill would have imposed a 25 percent tax on profits over what would be determined "reasonable" when compared to profits several years ago. The oil companies could have avoided the tax if they invested the money in alternative energy projects or refinery expansion. It also would have rescinded oil company tax breaks _ worth $17 billion over the next 10 years _ with the revenue to be used for tax incentives to producers of wind, solar and other alternative energy sources as well as for energy conservation.
The legislation also would:
_Require traders to put up more collateral in the energy futures markets and open the way for federal regulation of traders who are based in the United States but use foreign trading platforms. The measures are designed to reduce market speculation.
_Make oil and gas price gouging a federal crime, with stiff penalties of up to $5 million during a presidentially declared energy emergency.
_Authorize the Justice Department to bring charges of price fixing against countries that belong to the OPEC oil cartel.
Republican leader Mitch McConnell of Kentucky has acknowledged that Americans are hurting from the high energy costs but strongly opposes the Democrats’ response and has ridiculed those who "think we can tax our way out of this problem."
"Republicans by and large believe that the solution to this problem, in part, is to increase domestic production," McConnell said.
A GOP energy plan, rejected by the Senate last month, calls for opening a coastal strip of the Arctic National Wildlife Refuge in Alaska to oil development and to allow states to opt out of the national moratorium that has been in effect for a quarter century against oil and gas drilling in more than 80 percent of the country’s coastal waters.

That’s a reasonable argument against this.

I’m sort of hoping Obama is just saying all this but doesn’t actually plan on doing it.
reading the above copy/pasted article the plan didnt sound to bad to me tbh, the compays can avoid the tax if they use 25% of their profits on renewable energy or refinerys.

Ok, I can give you that, it is one way to fund what he wants to do. But as you stated, at this point in time I can’t see it really helping in the long term. I see you’ve answered some other posts of mine, thanks for the input.

assuming they are publicly traded companies, yes, since a stock represents the expected value of all future dividend payments.
I’m surprised they don’t just come out with price controls for gasoline. Just how they put a price control on domestic flu vaccines. That worked.

and those earnings will be made up some where because they aren’t going to let their stock price take a hit because of lowered earnings.

Here is the problem with people like you.
You are like, ‘Well hopefully he doesn’t mean it…’.

But then you vote for him.
Then he does it.
Then the economy REALLY tanks.

It will be YOU left holding the bag. I mean, the guy is going to do EXACTLY what he told you he was going to do when you elected him.

Let me give you an example of this….

GWB was asked a question before his first win. He was asked what he thought of the prospects of Saddam’s reign if he was elected President.
GWB predicted that Saddam would no longer be in control of Iraq at the end of his term if he was elected president.

I voted for GWB.
A couple years later we go into Iraq.

No surprise there. GWB did EXACTLY what he said he would do.
If you call that income redistribution, then the stimulus check Bush just sent out was income redistribution. At least Obama’s plan is to use the money they get from oil companies’ income tax, and not the income tax of every American.

Moron.
Except we all (except hippies) pay for gasoline and instead of doing something useful (help bring up production/refining capacity) they are pulling this socialist shit.

I won’t question your intellect since I don’t know you.

Well taxes are one thing that politicians are notorious for never actually doing as they said they would.

THAT SAID, I did say I "sort of hope". I’m not 100% against this occurring, I just want Obama to do a lot more than stimulus packages and raising taxes. We need some better economic theory coming out of the whitehouse than raise taxes or lower taxes. I’m not a big Ron Paul guy, but at least he got that idea right.

No.

If they oil execs could pull profit out of their ass, why wouldn’t they do it now, when they get to keep more of it?

GWB didn’t live up to many of his campaign promises at all. You are deranged.

"We’re not going to get into nation building"

"I"m a uniter, not a divider"

Because the market wouldn’t support any one of them doing it, that might change if their costs go up (the tax) and people’s ability to pay increases (the people getting the tax). You could be right, however this doesn’t really address the root issue.

If anything it will simply bring their stock prices back down to reality. Unless these companies were planning on making a seamless transition to alternative energies, they are bound to get HARD sooner or later.

In fact, if you look at how much the execs at big oil make, you have to wonder if they are just going to let their companies run their course and cash out, milking the world along the way. It’s not a bad idea if you’re them.

6:25 PM, July 31, 2008

Some things are just too easy — like attacking Exxon Mobil Corp. for yet another quarter of record earnings.

Of course Exxon made a lot of money in the second quarter. It sold $138 billion worth of oil, natural gas, chemicals, gasoline and other energy products.

The net profit on those sales: $11.68 billion, which just happens to be the largest quarterly profit ever earned by a U.S. company.

But Exxon’s net profit margin of about 8.5% — net income as a percentage of revenue — pales when compared with what many other blue-chip companies earned in the latest quarter.

Yes, this is the argument the oil industry always trots out when its earnings are under fire. But that doesn’t make it less true.

If companies such as Walt Disney Co. and Eli Lilly & Co. could rack up Exxon-like sales while maintaining their current profit margins, nobody would pay much attention to Exxon’s results. Instead, there would be demonstrations in Anaheim demanding that money-grubbing Disneyland cut the price of churros and cotton candy on Main Street.

Drug maker Lilly would do even better — much better. Its second-quarter profit was $959 million on sales of $5.15 billion, for a margin of 18.6%. On Exxon’s sales base, Lilly would earn a stunning $25.7 billion.

There are plenty of companies with profit margins well below Exxon’s, of course. Wal-Mart Stores Inc.’s net margin in its fiscal first quarter was a mere 3.2%.

And by some financial yardsticks Exxon is indeed earning spectacular returns, even if its net margins don’t stand out. The company’s return on equity last year — a measure of how well it deployed shareholders’ investment — was 34%, compared with 15% for Disney, according to Bloomberg data.

Consumer activists say their real beef with Exxon is that it isn’t spending enough of its loot to find new oil and gas reserves. Wall Street may even agree, to a point: The company’s shares slumped $3.95, or 4.7%, to $80.43 today, in part on concern that Exxon’s overall oil production is declining.

Then again, name a oil-rich country on the planet that is welcoming American energy giants and promising to make it worth their while to come in and drill.

Venezuela? Russia? Iran? California?

by increasing the price of their product

And you are ok with that?

So why aren’t they doing that now?

Do they not believe in profit?

I’m not against income redistribution in principle.

The same effect that’s vastly increasing oil profits is what’s hurting the low income families.

I don’t think it would be a horrible crime to redistribute some of that.

This article completely ignored the concept of scale. The bigger you are, the less profit margin you need to generate the same amount of money. The problem people have is the sheer size of their profit. 12 BILLION DOLLARS in ONE year. That money needs to find it’s way back into the economy, and the oil companies, according to Obama and others, aren’t doing it themselves at nearly a high enough rate. Hence the stimulus package idea.

The logic is there, it’s just a question of whether or not this is enough to fix the real problem, and most people after enough thinking will say no.

How about people actually going out and doing something for themselves than to let the government hold their hand their entire life?

What a wonderful and in-depth theory you have.

could the fact that there are multiple oil companies competing with eachother have anything to do with it

shhhh, don’t spoil the dream.

so after a windfall profits tax this situation would change?

The companies would incur a similar cost increase (like the price of oil going up) and could increase their prices.

edit: Also, a company not subject to the tax could increase his price anyway to stay in line with the others.

404 Steal not found

lol … riiiiiiight. How many exactly?
Not enough for any COLLUSION, is there??

Bah, nevermind …. that can’t possibly be the case in an industry like oil&gas. There isn’t any evidence of any cartels or price gouging or shit like that.

are you trying to say that the "big oil companies" are all fixing prices currently?

try

Spoken like an expert at being defeated by Karnejj.

except it’s a tax on profits, not a tax on oil sold.

that would be illegal

so are you saying you believe they are fixing prices at the pump currently?

…and oil companies don’t consider taxes a cost?

an expert at wasting my day talking to a wall

you believe that a group of elites has the god given right to take that which rightfully belongs to one person and give it to another.

whoever you responded to is a rational human being, and doesn’t believe that bullshit. you’re never going to agree. its pointless.

You don’t understand how the tax is applied or how economics works.

Go take basic economics, then we can talk.

I don’t have the time or energy to teach you now.

I outline basically the same thing (tax on net profits for corporations) here.

This is a typical response.

Instead of figuring out a real solution to the problem, we simply find the likeliest target and force them to pay for it.

This is the problem here in the US today, if you are successful, you are the devil. Yet if you don’t bother to take any initiative, find a job, succeed in life, you are coddled along on the wings of someone else’s investment and hard work.

WTF is the matter with people these days?

Good thing Congress is doing something to try and solve the problem…Oh wait, they went on a 5 week recess today and have no session days scheduled until 2009….

Bravo leadership.

"Aww… why you guys picking on Exxon? They might be the biggest turd, but there are smaller, yet stinkier turds out there. How dare you pick on one and not the other?? I demand PERFECTION!"

I find that amusing. I’m simply (or so I thought) stating that the can easily project the impact of the tax on their bottom line and increase prices accordingly. ah well…

have you read anything else I posted in this thread?

If they have the price-fixing power to raise their profit on demand, why aren’t they doing it already?

Do they not like making money?

This is pretty much where I stand. I don’t see this as a democrat or republican thing…this is what we get with our representatives these days and we’re all willing to just kind of go with it. (That kind of makes me sound like an anarchist but I’m really not. I’d honestly say I’m somewhere between a conservative liberal and a liberal conservative…yeah there’s a lot of room to wiggle in there )

It’s sad that Democrats are so fucking dumb economically. I get the feeling I’m going to be voting third party for my entire life.

Where do you think those profits go? Do you think they are just stored in a bottomless pitt? They get redistributed.

Investors want to see higher profits. If the profits are affected, prices will go up to appease investors.

You should never talk about economics again.

How about you take a class on economics?

Unfortunately I end up reading your garbage.

I understand why others ignore your posts. I should learn how to ignore your posts like everyone else does.

So wait, the investors are happy prior to this, even though the company is capable of increasing its profits and simply not doing it? This is the same argument we had last night, and you have learned nothing.

I have an economics degree from the university of chicago.

OMG, Y R U so dum?!

COMPANIES ONLY LOOK FOR WAYS TO INCREASE PROFITS IF IT IS NEEDED TO OFFSET TAX INCREASES! GET IT THRU UR THIK SKULL!!1!!!one!!eleven

No you dont.

K.

what is the price of reality?

looks like everything he said flew straight over your head

The whole idea of a windfall profits tax sort of assumes that they are doing just that. Nothing is stopping any one of the oil companies from lowering its price and attracting more business, if they truly do not need to make the margin they are currently making. So why has that not happened?

Either the current prices are as low as they can be sustained, in which case a tax will increase all the oil companies’ cost of doing business and force them to raise prices… or else they can afford to eat the cost, which means they are currently "pulling profit out of their asses" that they can use to pay this tax without it affecting the bottom line.

It would seem to me that your argument contradicts itself.

I’m sorry, but you don’t understand what you’re talking about.

I’ve laid it out pretty clearly.

i’ll bet you own oil stock

nope.

and it wouldn’t make any sense if I did, since I"ma rguing that a windfall profits tax would hurt the stock price but wouldn’t change the commodity price.

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