Thursday, November 10, 2005

The Windfall Oil Tax? What a load

Seriously trying to tax oil companies extra since they made billions of dollars off Katrina and Wilma etc is pure political nonsense. Must we remind our government that we are in a capitalists society?

"Sen. Charles Grassley, R-Iowa, in a letter to API, the oil industry group, called on its members to devote part of their profits to a federal program that helps low-income families pay their heating costs." -From an article by Sean Higgins of IBD

I couldn't disagree more, by taxing them extra when they make money, we are discriminating against the industry, companies like Exxon-Mobil (XOM) are already paying their 35% corporate tax rate, not to mention the government is taxing any dividends they pay, as well as capital gains made off the shareholders, plus they are taxing fuel by the time it gets to the pump which can vary from state to state.

And Grassley is demanding they pay an additional 10%? Crude prices are dropping, so is natural gas, but as long as crude is above $40 and Natural gas above $5 these energy companies will show healthy profits. Its natural supply and demand activity, gas prices are dropping, and hopefully the government cracks down on anyone that was unreasonably raising prices. But we must remember there were these things called "Hurricanes" that tend to cause hundreds of millions of damage to offshore oil rigs and shut down refineries; such events do tend to affect Supply & Demand....

Secondly I doubt Grassley would be the first to throw out government support of tax cuts if these companies earnings were at stake. Yet meanwhile the government managed to push through an energy bill which adds billions of dollars of pork(not all of it was useless).

But sometimes I just wonder which lobbyist is pushing for some of these ridiculous ideas.


At 5:08 PM, Blogger Salbert said...

They better not tax my EnCana (ECA). Would that hurt them, they are a Canadian company but do drill in the Rockies. The EnCana CEO was on Squawk this morning (Thursday).

At 6:02 PM, Blogger Investing Monkey said...

From the latest I saw they are taking credit for the fact that things are returning to normal and we're importing a buttload of oil from Europe last I checked which is reducing demand.

But why don't we let the politicians think that they were able to get oil lower by this talk of the "windfall tax".


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