By Libby
I keep hearing these arguments that the oil corporations shouldn't be penalized for making a profit but I'm with Skimble on this. Even if we acknowledge that the profits are partly, or even largely, a result of supply and demand, the fact remains that there's a correlation between the rising price of oil and the mess Bush created in Mesopotamia. Skimble is right in that the corporations profit from the war without having to lift a finger to support it. And the profits have been huge.
Today's WSJ shows quarterly net income (i.e., profit) for Shell of $9.08 billion. For BP it's $7.62 billion. Those profits are billions, not millions, for three months of income.
That's almost $17 billion of profit for just two companies, excluding ExxonMobil, in this quarter alone. At this rate, the combined profits of the industry for the year will exceed $100 billion.
Even in rapidly decaying US dollars, that's a f*ckload of money. [...] On the other hand, we the American taxpayers are not volunteers. Indiana's middle class is paying more for the war than the oil conglomerates. It is only fitting that BP, Shell, and ExxonMobil be harshly taxed to help pay for the war that makes them so f*cking profitable.
Skimble is right on and spare me the free market arguments. Between futures trading and supply machinations, the oil market is one of the most manipulated marketplaces we have and fuel is not a commodity that's particularly discretionary. For millions of Americans, not driving is not an option and the handful of megacorps essentially have a monolopy on the product.
But let's not look at a windfall tax as a punishment, but rather a patriotic contribution from the megacorps to the overall wellbeing of the nation. They've made a fortune from this war and really they should be voluntarily tithing some portion of those obscene profits to paying for it in order to take some burden off the working class. But since we can't count on their altruism, then a war tax seems fair to me. [via]
I've written a bunch about this topic. First at http://swimmingfreestyle.typepad.com/swimming_freestyle/2008/05/the-nuance-of-w.html.
ReplyDeleteThen http://swimmingfreestyle.typepad.com/swimming_freestyle/2008/05/carly-fiorina-o.html on corporate tax policy.
Sorry....didn't know how to hyperlink these.
Thanks for the links Jay.
ReplyDeleteI see one major problem here, though. Regardless of whether you think that the oil companies ought to pay a "war tax" or a "windfall tax," and even though you are certainly right, at least to a point, that the war has benefited the oil companies, a special tax on oil company profits won't ultimately be paid by the oil companies. It will be paid by their customers in the former of even higher gas prices. If you're like me and don't have a problem with higher gas prices for environmental purposes, then this is fine. However, if you are angry about high gas prices, placing a special tax on oil company profits is a really bad way to go about solving that problem.
ReplyDeleteThat's a good point Mark and I'm not sure how to address it but it seems likely that gas will go up in price no matter what. At least this way, the long term monetary burden from the war would be defrayed a bit.
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