To hear the media and the politicians tell the story, the mean old oil companies are really putting the screws to all of us consumers these days.
The only evidence they need to demonstrate their hypothesis is to direct our attention to the “record 3rd quarter profits” recently announced by the oil companies. The demagogues are pouring out of the woodwork screaming “PRICE GOUGING” and “it just ain’t fair for a company to be making that much money.”
Even the normally fiscally conservative Republicans are getting in on the act:
CONCORD, N.H. --Republican Sen. Judd Gregg, New Hampshire's fiscal conservative and chairman of the Senate Budget Committee, is calling for a tax on excess oil profits to help fund a federal heating assistance program.
Gregg says he is infuriated by recent profit reports from oil companies -- he wants those profits to be taxed and the money used to fund heating aid for the poor and reduce the deficit.
"Some might call this a novel approach for me, but I cannot sit back in good conscience while those in our society struggling to heat their homes are being left in the cold by oil companies," Gregg said in a statement from Washington…
“It's an inexcusable act by the oil companies to be profiting at the expense of the American people as we go through these extraordinarily high energy prices, $3 a gallon for gasoline, up to $2.50 for home heating oil," Gregg said.
I don't believe that the oil companies can be honestly accused of price gouging based on only their record profits as evidence. If you make 10% profit on oil when it costs $10 per barrel in 1990, you would only earn one dollar per barrel in profit.
Today, with oil at $60 per barrel, your same profit margin, 10 percent, would yield a 6 dollar profit on each barrel, a FIVE HUNDRED PERCENT increase. If the profit margin on a percentage basis remains constant, you can't scream "price gouging." Price gouging could only be claimed if the oil companies increased their profit margins ABOVE what they have traditionally charged, and as far as i can determine they haven't done that.
By the way, I believe that a publicly or privately owned company should be allowed to let market conditions determine their profit margins, not the media and the government. If you want to tell a company how much they should charge for their product and how much profit they should earn, you should BUY STOCK IN THE COMPANY and then VOTE at the shareholders meeting.
It's a known fact that the oil companies were losing their shirts financially when oil was selling at the $10 per barrel figure, and I didn't hear the media and the politicians screaming for incentives and financial bailouts to help the oil executives and stockholders. The oil companys were forced by the market conditions to merge, and many smaller oil exploration companies--the so called "wild cats"--were forced out of business.
And what Gregg and his fellow bullshit artists in the US Congress are failing to tell you is that the Federal and state governments have collected TAXES on gasoline at a rate nearly DOUBLE the PROFITS that the oil companies have EARNED. Remember that the oil companies are doing all of the work and taking all of the risk?
If you don’t believe me, just look at this chart from the Tax Foundation:
In actual figures, the oil companies have earned $643.0 billion in profit between 1977 and 2004, where the federal and state governments collected over $1.343 trillion in taxes over that same period.
One trillion, three hundred forty three billion dollars...think about that number for a minute.
Or put it this way: $1,343,000,000,000.00.
Do you understand?
THE TAXES ARE NEARLY DOUBLE THE PROFITS EARNED.
Where is the outrage in the media?
Where are the admissions of government's shared responsibility for high gas prices?
Why doesn't the government return some of THEIR windfall taxes to the people that paid the money in the first place--the taxpayers?
I wouldn't hold my breath waiting if I were you...
And here is the true irony in this situation. Rather than offering to REDUCE the taxes to help people afford gasoline and heating oil, Gregg and his band of merry men want to RAISE additional taxes so that they can then distribute the new revenues to “working families” and the “poor” to help pay heating bills. Of course it would be a pretty good guess to assume that the upper "middle class" and "wealthy Americans" wouldn't see a dime of help heating their mansions this winter.
TAX and SPEND, TAX and SPEND, I want to go somewhere and throw up. Better yet, I think that it's time to send my Senator, Saxby Chambliss, another E-mail. We're practically on a first name basis now, you know?
Only in America...
This is insanity...
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