Thursday, December 01, 2005

Oil and Profits/Shouldn't gasoline be an Entitlement?

Listening to all the incessant whining about gas prices these past few months, you would think that gas should be handed out to the population like debit cards to New Orleans residents. Obviously, capitalism and the laws of supply and demand are no longer taught in the public schools (schools which seem to spend an inordinate time 'teaching' environmental nonsense, leftist politics and the ever so popular subject of diversity). Of course the Dems. blame it all on Dubya.

If you don't really understand the whole supply/demand issue, be sure to read this article:
Punishing Success in the Oil Business
The American economy is based on the pursuit of profit, an approach that has given us one of the highest living standards in the world. But now oil companies are in trouble with Congress, and for what? Making too much money--for being too good at what capitalism obliges them to do.

But consistency has never been the hallmark of our elected lawmakers. Confronted with painfully high gas prices, they are eager to punish someone for the resulting discomfort. After the petroleum industry reported sharply higher profits in the third quarter of this year, there was no doubt who would be wearing the tar and feathers.

Recently, the Senate Finance Committee voted to slap the major oil companies with a $5 billion tax aimed at confiscating some of these "windfall profits"--with the votes of four Republicans, whose party supposedly cherishes free markets. Sen. Byron Dorgan (D-N.D.) has his own plan. When a barrel of oil fetches more than $40, the amount above $40 would be subject to an extra 50 percent tax.

Corporations, of course, already face a top federal tax rate of 39 percent on their profits. Tack on a 50 percent surcharge, and oil company executives may soon be asking the question posed by songwriters Seymour Simons and Gerald Marks: "Why not take all of me?"

Still, a lot of people think the reason gasoline prices soared in September is that oil companies are greedy. But if that's true, why didn't they raise prices a year ago? For that matter, why don't they raise them now? The critics on Capitol Hill don't seem to notice that pump prices have fallen by 92 cents a gallon since Labor Day, a 30 percent decline.

Read the whole thing here

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