WSJ clowns on the windfall profits tax idea for oil cos

[Aggie Hoopsfan]

http://online.wsj.com/article/SB120977019142563957.html?mod=googlenews_wsj

[George Gervin's Afro]

If oil companies believe their earnings from exploring for new oil will be expropriated by government – and an excise tax on profits is pure expropriation – they will surely invest less, not more. A profits tax is a sure formula to keep the future price of gas higher.


So if Exxon were to be taxed they would stop exploring for more oil? less exploration? They will invest less so they don't have to pay the increased tax on earnings? So Exxon would not invest anymore? What kind of company would rather not pay a tax than invest their earnings? I am not an economist but am I supposed to believe that Exxon would rather not make anymore money to not pay a tax?..

[Yonivore]

ExxonMobil's 2007 profit of $40.6 billion profit, relative to its revenue, was smaller than Microsoft's and many other corporations'? Why aren't you picking on them?

And reducing ExxonMobil's profits will injure people who participate in mutual funds, index funds and pension funds that own 52 percent of the company?

[RandomGuy]

ExxonMobil's 2007 profit of $40.6 billion profit, relative to its revenue, was smaller than Microsoft's and many other corporations'? Why aren't you picking on them?

And reducing ExxonMobil's profits will injure people who participate in mutual funds, index funds and pension funds that own 52 percent of the company?

Bingo.

About high oil prices benefitting people in retirement:

It is a subsidy much like Social security in that the money comes mainly from people who drive to work everyday and goes to people who don't work anymore.

Just thought I would throw that out there as an interesting way to look at it.

[Viva Las Espuelas]

ExxonMobil's 2007 profit of $40.6 billion profit, relative to its revenue, was smaller than Microsoft's and many other corporations'? Why aren't you picking on them?

And reducing ExxonMobil's profits will injure people who participate in mutual funds, index funds and pension funds that own 52 percent of the company?
and don't for Big Corn, Big Milk, Big Wheat, etc.................

[Viva Las Espuelas]

Bingo.

About high oil prices benefitting people in retirement:

It is a subsidy much like Social security in that the money comes mainly from people who drive to work everyday and goes to people who don't work anymore.

Just thought I would throw that out there as an interesting way to look at it.
see, but we can't look at that. this won't get anyone elected if this information gets out. i guess we do need a "change"

[Geezerballer]

So if Exxon were to be taxed they would stop exploring for more oil? less exploration? They will invest less so they don't have to pay the increased tax on earnings? So Exxon would not invest anymore? What kind of company would rather not pay a tax than invest their earnings? I am not an economist but am I supposed to believe that Exxon would rather not make anymore money to not pay a tax?..

The point is that if they are taxed MORE on their earnings, their return on investment (ROI) will be lower. If ROI is anticipated to be lower on exploration than on some other investment possibility, the Exxon management has the obligation to their stockholders to make the decisions that will maximize ROI.

This isn't exactly uncharted territory, "windfall profit taxes" have been tried before w/ dismal results. If the government were capable of "managing the economy" don't you think there would be some evidence of it by now?

[Nbadan]

Think of the Saudi junta who have to live with only 38 diamond covered Mercedes!

http://www.partstrain.com/images/The_Auto_Blog/diamondmbsl550.jpg

[Aggie Hoopsfan]

Think of the Saudi junta who have to live with only 38 diamond covered Mercedes!

http://www.partstrain.com/images/The_Auto_Blog/diamondmbsl550.jpg

Think of the Saudi junta getting their money from China instead of us if liberal idiots do something stupid here in America.

Yeah, that'll show 'em. And we'll still be paying $8 a gallon :rolleyes

[Wild Cobra]

Fucking idiots.

The state and federal governments profit more in taxes on gasoline than the oil companies do.

Taxing them more will only raise the cost of fuel as they will raise their prices to cover taxes.

[xrayzebra]

S I am not an economist .....

You certainly prove that point.

[ClingingMars]

We've seen it before. See Jimmy Carter.

- Mars

[RandomGuy]

We've seen it before. See Jimmy Carter.

- Mars

Actually, the economy is far less energy intensive per dollar of GDP than it was during 1976-1980

The fact that we are in record territory with oil prices without a profound economic crunch reinforces this.