I guess Obama got the message:
I am sure the media will play this over and over and over again for free like they have all of McCain’s attack pieces.
*** Update ***
In before the trolls. No, I still do not like the concept of windfall profits taxes.
Reader Interactions
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nightjar
Windfall profit tax won’t work when the industry your taxing controls so much of the market apparatus. And this is precisely what Obama needs to do with the facts and only the facts. Mccain and his Alice B Toklas alter ego is a sitting duck quacking at the moon.
the whacker
The media would play it if it had included a shot or two of Britney, Paris, and Moses. Otherwise, no.
cleek
meh
he’s gotta have an ad that says:
Jake
They must have some internal polling that indicates people really like the windfall profits tax idea. Count me in the group of people who’re disappointed that Obama’s pushing this so much.
I’m not sure it makes a whole lot more sense than a gas-tax holiday, unless you can offer the companies a one-to-one “out” on the tax for investing in alternative tech. But as far as I know, Obama’s never brought that up.
Dennis - SGMM
How about an ad highlighting McCain’s four changes of position (So far) on raising Social Security payroll taxes?
Apsaras
Of course they’ll play it over and over, followed by the learned heads of our national media complaining that by fighting back, Barack Obama has somehow lowered himself to the realm of Politics as Usual.
calipygian
Yes, we should take the oilman President’s advice and the advice of the oil companies that more drilling is the answer to our energy problems, because their advice has been so precient in the past.
How stupid are the American people anyway?
AkaDad
We the people own the oil. We allow the oil companies to profit off our oil. If their business practices hurt our economy, then we the people can, and should, do what’s right for the country.
Zifnab
The media won’t play the ad per say, but I’m very confident that they’ll use the ad as proof of Obama’s sudden switch to very negative, very unserious, very self-damaging attack ads that do little more than make baseless allegations against a noble Vietnam veteran who was tortured in Vietnam while he was serving in the Navy protecting America’s freedoms America America John McCain Vietnam 9/11 America.
Brian
“John McCain is a liar. Every time he opens his mouth, he’s lying to you. He lied about X, he lies about Y, he lies about Z twice a day, and he’d lie about K if he knew anything about it, which he doesn’t. He’s a bullheaded ignoramus who thinks “my way or the highway” is a valid governing philosophy. We’ve already had 8 years of that – and look how that turned out. Do yourself a favor, elect someone who’s not a raging asshat. Vote for me, Barack Obama, cause McCain’s a crazy old douchebag.”
Now that’s an ad.
But seriously, I am still not sure he needs to go negative just yet, at least not as hard as McCain is going. He’s still doing well enough in the polls, it seems, and while he won’t have the advantage of time in September and October, I don’t know if that makes a difference. I’d much rather see him pound McCain back and forth during the debates. I know sports metaphors are limited, but I think of Obama and McCain as boxers, with Obama holding back his knock out punch until the right time.
As far as the politics of the windfall taxes, I don’t know that much about it, but suffice it to say that if this limits the appeal of the gas tax nonsense, it’ll be worth it.
greynoldsct00
LOL!! If only…
Hey, I recall reading somewhere about an idea to only apply windfall profit taxes if Big Oil wasn’t putting a certain percentage of the profits back into the research and devlopement of alternative energy… that would seem to make more sense. Force them to put their money where they claim it’s going…
jake
I saw gas for 3.73 this weekend so Obama is a big doody head liar!
Shhh. Think of how much fun it will be listening to McCain explain why it is a bad thing.
Grand Moff Texan
In the meantime, Rasmussen polls voters on the wrong ad.
See? No racism here!
.
Litlebritdifrnt
John – OT but I thought you would like to know that you are now an “anti-Obama” blog cause apparently those EVIL people over at the Obama campaign used Sitemeter to screw up ONLY anti-Obama blogs, so you the Retort, MYDD and several others can now officially call yourselves part of the PUMAPAC (or the NQ Nutjobs whichever works). Thought you’d like to know.
Would try to link but I’m afraid I’ll mess it up and you’ll yell at me :)
Dennis - SGMM
They will mention the Obama ad and then segue into a montage of McCain’s greatest hits.
“Is the Obama ad a reaction to this? (Roll McCain ad.)
“Or this?” (Roll McCain ad.)
Maybe this is what got under Obama’s skin. (Roll McCain ad)
Here to discuss are David Brooks, Lindsey Graham, Charles Krauthammer and Zombie Spiro Agnew…
Jake
The ad is now the front-page story on CNN.com, along with a reference to Mitt Romney describing it as “dishonest”.
That’s sort of like Tom Cruise calling Russell Crowe a fairy.
Johnny Pez
We’ll find out in (checks calendar) 92 days.
cleek
they elected W, twice.
demimondian
Ironically, this isn’t an attack piece, and that’s why it won’t be newsworthy. It’s negative, yes, but it’s negative in a fair way.
If it were negative in an unfair way, the media might play it.
Legalize
I believe that this spot lines up in the “duh” column. Create this spot another 15 times, all of which linking McBBQ to Bush on every single fucking issue. If the wingers whine about what the fuck ever, which of course they will, simply ask why they have a problem being compared to the president. They will point out that they differ with the president on issue X, Y, and Z. The Obama folks need only point out every instance in which McSame has flip-flopped on issues X, Y, and Z.
Repeat.
Gradually get more aggressive with McCrazy being confused as to matters of global importance. Replay McLoser’s own fucking baffling statements over and over and over again.
Incertus
Starting to sound a little like Hugo Chavez and Evo Morales there. I’m with you on it, by the way.
calipygian
OT, and it needs to be noted, but needless to say, the Corner utterly fails to draw any pertinent conclusions from what Aleksandr Solzhenitsyn’ said during his dissident days.
DSB
You know, Exxon-Mobil spends more on their CEO than they do investing in research. I think your idea would be a good one.
greynoldsct00
I don’t know which would be worse, having McCain as president or dealing with the depth of despair at the American stupidity for electing him.
greynoldsct00
Don’t feel bad, I actually printed out John’s instructions and I still can’t get it to work right.
Perry Como
That’s easy enough:
John McCain’s policies are confused. After decades in Washington he offers the same old solutions to the problems we face. Instead of offering new, fresh solutions, John McCain offers us the same failed policies that he has supported in Washington over the last 30 years.
If McCain wants to dog whistle, the Dems should dog whistle into a bullhorn.
CT
I like this one-hit McCain, tie him to Bush, then a quick pivot to an affirmative case for Obama. Hopefully, there will be more in the pipeline in a similar vein on other issues. Tough, contrast-drawing ads, one after the other. Force the McCain camp to defend their policies, its the last thing they want to do.
AkaDad
What I meant to say was, I’m a free-marketer, and I support oil profits before my country.
Dennis - SGMM
This might be tough. McCain changes his policies several times a week.
Punchy
I’m guessing McCain in 2008. Cynical. Figger it’s easier on the heart to simply believe we’ll get McCain, then be pleasantly surprised, then the other way around.
I have zero faith in my fellow Americans to not vote in a guy whose temper is uncontrollable.
jake
In RepublicanLand any time Obama runs an ad about McCane it is an attack piece. In fact, any time Obama opens his mouth it is a nasty brutal savaging of McCain, America, mom, apple pie, and possibly Moses, Britiney & Paris but I’m not sure about those last three.
How the press runs it will depend on how much BBQ they’ve injested.
Legalize
“John McCain statements on his foreign policy positions are often confused.”
– video footage of McCain saying stupid shit –
“Barack Obama has consistently argued for X, Y, and Z”
– video footage of McCain blasting X, Y, and Z –
“But does John McCain know what he actually believes?”
-video footage of McCain supporting X, Y, and Z –
gopher2b
Too bad he didn’t land on that oil rig. That would have been a nice visual.
BTW, why does pointing out that a “windfall” tax is a bad thing make you a troll.
Here is a solution: Move into the city, sell your car, and walk and/or take the train/bus to work/store/movies/strip club. I don’t have a clue how much gas is here and I don’t care. Although I did notice that three chicken breasts cost me $15.
Andrew
McCain’s real weakness will be on Social Security. The ads that comes out of his disgrace comments practically writes itself:
Face
I find it stunning that, after watching the housing market collapse, the dollar collapse, the Dow/Daq stagnant, jobs disappear, inflation, etc. etc, all under Republican rule, that someone could watch a commercial and say, “Wow, didn’t realize Obama is that popular. Guess I have to vote for McCain instead”.
I’ll say this again — if the Dems cannot win the Presidency under these conditions, they may never win it again.
calipygian
Keeping cars properly maintained and maintaining proper tire inflation will save as much oil as we will get by drilling. But, the Republicans are mocking this common sense part of Obama’s energy policy:
How much would I give if an Obama commercial said something like this:
Which, of course, is true in a perverse macarbre sort of way. Just like Republicans making fun of a way to save 800,000bbl a year by keeping your tires inflated is, well, INSANE!
Sure, consuming those 800k/bbl may be profitable for a reliable GOP supporting sector, just like cancer surgery and treatment is a lot more profitable for the reliaably GOP insurance industry than prevention and screening. But somehow I dont think even the GOP is brazen enough to suggest not getting cancer screenings.
Although I may be wrong.
Perry Como
Oh exploitable!
Zifnab
Hey, John voted for Bush twice. And he’s dumb, but he’s not stupid.
gopher2b
Obama is clearly in the pocket of Big Air.
AkaDad
Very nice.
Zifnab
Said the candidate in the Party of Personal Responsibility.
Also not an energy policy for the United States of America:
* Driving something that gets MPG in the double digits.
* Turning off the air conditioner when it isn’t needed.
* Keeping the refrigerator door closed, because you’re letting all the cold out.
* Washing your dishes in the sink before you put them in the dishwasher, so you don’t have to run it twice.
* Turning off the TV before you go to bed.
The Democratic Party really is the Mommy Party in America. My mom complained about doing these things all the time.
Dreggas
Well considering the Republican plan is to continue fucking up our education system and in effect creating a dumber and dumber populace it’s not a surprise.
I watched Harold and Kumar escape from guantanamo bay last night with the gf and a friend (it was hysterical IMO), the funny part to me was when the gf’s friend said “those people are fucking stupid” in regard to the people playing members of the DHS. All I could think was “that’s your government for the past 8 years”.
Svensker
What irritates the heck out of me with this whole thing is that we are allowing the narrative to be: it is Big Oil’s fault that we have high gas prices. We must punish Big Oil.
Big Oil is profiting from Dubya’s bone headed moves in Iraq and war-mongering against Iran. But Big Oil is not the problem! It is Dubya and his enablers who caused the instability in the ME and it is Dubya and his enablers who tanked the dollar. Those two things are big movers in the uptick in oil prices. When Israel threatened to nuke Iran a few weeks ago, oil prices went up $11 in about 2 hours.
There are, of course, other things driving up the price, which won’t go away if peace breaks out in the region, but Dubya and the war-mongers should definitely be getting a lot of the blame. Instead, we’re blaming Exxon.
We should be looking at our pump prices as blowback, rather than price gouging. It pisses me off that Dubya is skating out from under responsibility for this one, too.
Dennis - SGMM
Holy shit! Did you catch the continuous eye-blinking in Camera Angle #3? McCain looked like someone who was hit in the head with a sockful of wet sand. If he pulls that in a debate he is toast.
Martin
The reason why windfall tax is being looked at is that the market doesn’t normally see costs and revenues so strongly decoupled as you do with oil. The cost to extract oil is still running between $8 and $30/bbl – and the latter is really worst case situations like Canada’s tar sands. $15 is considered high.
The existing tax structure assumes that the taxes will be built into the cost and have some impact on what consumer pay, but that’s not happening here. In fact, the oil companies have *no* control over the price of oil. That sucked for them a decade ago when oil was $10/bbl and they were losing money, which is why we started chucking subsidies at them (and I have no problem with that), but now that it’s over 1000% higher, they also have no control to lower the price so why shouldn’t we do the exact reverse of the subsidies and take money back out of profits?
That’s the thinking, and I can’t argue with it too much. Any reasonable alternative would end up being effectively the same thing, so I figure we might as well be up front about it. I don’t approve of it for all industries, but then I don’t approve of necessary fungible commodities being privately controlled either. I lived through Enron once, I don’t want to do so again. No corporation (or small set) should be able to shove the economy as strongly as the oil drillers can. The nation simply shouldn’t stand for it. Citizens aren’t beholden to Exxon.
Incertus
Big Oil isn’t blameless here. They supported Bush politically and backed his policies. They currently support McCain and want more of the same. They’re not the only problem, but they’re a huge fucking part of it.
AkaDad
NASCAR got Obama’s back.
Zifnab
That’s basically where I’m at as well. This privatize profit, socialize loss model of doing business is just ridiculous. I honestly can’t remember a year when Exxon was ever losing money, so I have a hard time feeling sorry for them when oil was cheap. Rockefeller has been doing quite well since the 1920s. Big Oil never really needed those incentivizing tax breaks.
That said, once you start handing out half a billion dollars to encourage development and the price spikes to $120 / barrel, why is it taboo to take your money back on the investment?
Honestly, I’d like to start seeing a windfall profits tax clause get worked into every subsidy package we pass. Companies can suck at the government teet today, but they need to pony up tomorrow when they’re grazing in greener pastures.
Svensker
I didn’t say they were blameless. But Dubya and The Enablers are the real culprits and they’re not getting any of the grief. Republicans have the nerve to do stunts in the Congress to blame the Dems for high prices — why are we letting them get away with it? Why are we blaming Exxon? Let’s blame Little Boots, Big Dick, along with John Boehner, Joe Lieberman, and company. Not to mention Rush Limbaugh, Bill Kristol, and Paul Wolfowitz.
They wanted their god damned war and they didn’t want to pay for it. Now we’re paying. Why isn’t that the meme, rather than Big Oil is making too much money now?
NR
Well, this ad is a good start. But hopefully that’s all the Obama campaign sees it as.
The most important thing Obama can do right now is drop his ‘new politics’ schtick. It’s not working. It has him tied, or trailing, against McCain in an election that provides the biggest advantage for Democrats we’ve seen in a generation.
Americans don’t respond to new politics. They respond to the old politics. When anger, frustration, and resentment are on your side, you use that. To do otherwise is criminally stupid.
Obama needs to go on offense. Hit McCain hard and don’t let up until the election is over. We need to quit worrying about how to respond to McCain’s attacks and make him respond to our attacks. Remember, one of the cardinal rules of politics is “If you’re responding, you’re losing.”
Brachiator
In the past, windfalls profits taxes neither punished oil companies nor produced promised revenues, so the mob calling for windfall profits taxes is much like the mob calling for offshore drilling. They are short on reality and long on the need for simplistic answers to complex questions. The belief in a windfall profits tax is for some people what the belief in a gas tax holiday is to John McCain—a bad policy easily refuted by the facts.
There are things that Congress and the President might do to increase the revenue the oil companies pay through taxes (reviewing industry credits, depletion and other allowable expenses), but this cannot easily be broached in soundbite sized bromides.
Alternative energy is not the oil industry’s strong suit, so I would not necessarily look to them for anything new or innovative. The railroads were the most dominant transportation industry of the 19th century, with tremendous profits, but the rail barons could not anticipate or direct developments which led to the auto or airline industries.
justinb
It has him tied, or trailing, against McCain in an election that provides the biggest advantage for Democrats we’ve seen in a generation
By what measure? Not by EVs, AFAIK.
Church Lady
The windfall profits tax idea is just a stupid as the gas tax holiday idea. In both cases, it is pure political pandering. Here, Obama is saying that he’ll buy our votes for a $1,000 check. Thanks, but no thanks – my vote doesn’t come that cheap. The same arguements used against the gas tax holiday apply to a windfall profits tax as well – there is nothing to keep the oil companies from passing the tax on to the consumer in the form of higher prices at the pump. Frankly, I think it is a lose-lose proposition for both the consumer and the U.S. Treasury. The only true winner, as always, will be the oil companies.
At the beginning, Obama said he was a new kind of polititian – he was the guy who would tell us the truth, tell us the hard things, things perhaps we as a whole didn’t want to hear. That guy is gone – just like McCain, he’ll tell the electorate anything, and change positions on anything, all in the effort to get himself elected. He is no better, or worse, than anyone else who has ever run. Anyone that thinks so is deluding themselves. As far as I’m concerned, a pox on both of their houses.
Martin
That’s true of every industry. Once they get successful at what they do, they stop trying to find success and focus on how to maintain it. Innovation comes from the people not making money. They innovate in order to take something from the big guys that have dug in.
Brachiator
I agree that the windfall profits tax is a bad idea, but it is just not true that oil companies would automatically pass the costs along to consumers. Hell, the current flux of gas prices does not bear any strong relation to oil production costs.
Yawn. The problem here is that many voters want — no, demand — that politicians tell them what they want to hear.
Blaming Obama (or McCain) for some voters’ desire to be treated like children is a waste of time.
Martin
Um…
Since the price of gas has nothing to do with the cost of extracting the oil, why would a windfall tax change that? By your reasoning, we should all be paying $9/gal for gas since there is nothing preventing Exxon from just raising prices. Equivalently, if the government gives the oil companies $100B they’ll drop the price of gas to $0, correct?
What you are missing is that refiners and retailers aren’t making money. Maybe a little, but a very little, which is why the big oil companies are selling off their retail operations. The retail increase in gas prices is directly attributable to the cost of oil that the refiners pay, which is not connected at all to the cost of extraction. It’s purely driven by the global commodity market. Exxon’s only control over that price comes from their ability to increase/decrease production and their ability to increase/decrease demand from their own refining operations. If the cost of getting the oil goes from $15/bbl to $30/bbl as a result of a windfall tax, they aren’t going to reduce production because they’re still making $90/bbl in profits.
You’re making a supply-side argument.
NR
justinb – State polls are lagging indicators because they aren’t conducted as often as national polls. But with Obama losing support nationally, that means, by definition, that he’s losing support in the states as well. We just aren’t seeing it yet.
The next round of state polls will be ugly for Obama.
That said, I don’t think it’s time to panic just yet. Every campaign has bad weeks. And hopefully this last week will serve as a wake-up call to the Obama campaign. They cannot win this election by taking the high road. They need to attack. They need to define John McCain.
This ad is a decent start, but they need to ramp it up, and fast. Nothing should be off limits. Hit McCain on his consistent support for Bush. Hit him on his foreign policy confusion. Hit him on the way he left his first wife (Seriously – if older white women are a swing voting bloc, how many of them do you think will be able to stomach voting for McCain once that story is out there?). Get on offense and stay there.
And if Obama can’t keep that kind of sustained attack on McCain up through the election, he needs to pick a running mate who can.
Zuzu's Petals
I have a bit of a problem with ads that say things like “Big oil contributed $2 million to McCain,” when it’s really the total given mostly by individuals employed by the oil industry.
WaPo
Granted, a fair amount of that recent influx came from oil “executives,” but it’s still individuals and evidently a lot of it came just after McCain announced his support of expanded offshore drilling.
I’m not saying the guy isn’t craven in his courting of the industry. He is, as far as I can tell. I just don’t think it’s fair to imply that it’s “big oil” lobbyists funneling money his way, any more than it was fair to ding Hillary for the couple of donations she got from Enron employees.
USA Today
darms
Down here in EPU land this will probably be missed but there’s something that really bothers me about Exxon-Mobil’s record profits quarter after quarter: Oil costs a lot more these days, undeniable. Gasoline costs a lot more than it used to as well. Where are those big increases in oil company prophets coming from then, when we hear that refiners aren’t making the money and the retail stations aren’t making the money, either?
Zifnab
Yeah, not even close. The 1980 windfall tax didn’t bring in as much revenue as claimed, but I don’t see anyone in government turning up their noses at $146 billion in revenue. Yeah, it’s not the hyper-inflated amount Congresscritters claimed, but I wouldn’t call it negligible. I’m sure the oil companies would agree.
Furthermore, the tax is just one side of the equation. Companies have been accepting billions in subsidies and tax breaks since the Cheney Energy Task Force inspired energy bill created massive hand outs to “encourage exploration” that never occurred. We are simply recouping our losses.
Now, if you want to go an alternate route – reworking the tax code and the land lease contracts to handle royalty payments or depletions differently – I’m willing to listen. But poo-pooing the windfall tax because it doesn’t bring in as much revenue as lofty predictions would expect… well, that’s just silly.
gopher2b
There are other oil companies. That keeps Exxon from raising the price to $9/gal.
If you hit them all with the same tax then they will pass that to the consumer (all you’ve done is collectively raise their costs). If you hit just Exxon, then yeah, they wouldn’t be able to pass it on.
Martin
It completely comes down to the gap between oil drilling costs and raw crude prices. There are two commodities markets at work here – one for crude oil (the one everyone talks about) and the one for unleaded gasoline.
Here’s the chain:
Oil driller pays to haul the stuff out of the ground. They then sell it on the open market and depending on quality (there’s good oil, like the Saudi stuff, and there’s shitty oil, like the California stuff) they get the price you read in the papers or some fraction thereof.
The buyers of the oil are generally refiners, or governments who lock the stuff up in reserves (in some countries the govt. is the refiner). They’re they consumers and except when prices are bumping into the extraction costs, they are driving the price. An added group are speculators, who buy the oil today, shove it in storage, and sell it later, hopefully more. They affect the price somewhat, but it’s not clear how much. Truth be told, there’s only so much storage space, but storage is cheap and price fluctuations are large at higher prices, so there’s a LOT of money to be made if you don’t fuck up.
The refiners have their cost for transport and refining. Figure $.40-$.50 of the cost of a gallon of gasoline goes to this.
The refiners sell the gasoline on another commodity market where retailers buy it. Retailers are the consumer and again normally drive the price, though right now the price is set by the refiners because they’re making virtually no profit right now. The wholesale price of gas is pretty damn close to cost and they are at no obligation to sell at a loss.
The retailers buy it and add in transport costs, taxes, and their profits. Retailer profits used to be about 4% but that continues to come down due to competition. Today it’s probably closer to 2%. They make up much of their profits in the mini-mart (used to be service, but not many gas stations do repair any more). That’s about $.40 of each gallon of gas as well.
So, the overall costs of a gallon are right now about $1.20-$1.50 per gallon, which includes everyones cost and everyone’s profit *except* for the drillers. If you paid $4.20 recently (as I did) then about $3 or so of that went directly to whoever took the oil out of the ground and sold it on the open market. That could be Exxon or Saudi Arabia. But the drillers are making all the money.
The reason for the two markets is that transportation is a large part of the cost if you try and keep control of the oil from the ground to the pump. If Exxon pumps the stuff in Alaska but has their refineries in New Jersey, it’d cost a fortune to move it from AK to NJ. Instead, they sell it on the market and it’s bought by refiners in CA or Japan or wherever. Exxon refining then buys on the open market probably from the north atlantic. In this respect, Exxon drilling and Exxon refining are two entirely different operations. Once Exxon refines it into gasoline, they aren’t going to truck it from NJ to California, so they sell it to local stations (could be Shell, etc.) on the open gasoline market. So again, Exxon refining and Exxon retail are largely independent operations.
Basically, it allows the whole thing to operate with minimal transportation costs, but it also means that Exxon doesn’t look at what you pay for gas and what they pay to extract it and match the two in any respect. Their price for oil at the refinery stage is what the market sets it at. The oil they are buying could be BP or even Exxon – Exxon refining is paying the same amount. The high prices are killing the retailers – since there is a lot of competition there, margins are low. The refiners have to buy, because we don’t have a lot of excess refining capacity and we have no meaningful surplus of gasoline on the market, so they pay market rates and pass the costs up the line to us, but their margins are also low.
The reason that oil prices are high is that there are other buyers for it willing to pay more. China and India, most notably are industrializing quickly and a weak dollar (most oil is bought and sold in dollars regardless of where you are) means that other nations are willing to pay more for oil than we are. There just isn’t excess production to make up the gap to lower prices (for us), but the price increases are worst here because other currencies are doing well against the dollar, so they are getting more dollars per yen, euro, etc. and therefore more oil, so they can afford to bid up the price.
Someone a decade or more ago figured out that if the Chinese and Indians had car ownership rates that equalled Americas, that those two nations alone would consume all the oil produced on the planet. The harsh reality is that we are living VERY far above a standard of living that the rest of the planet can share in. As they make gains, at some point we’re going to have to accept losses until some kind of equilibrium can be reached. Either that, or we have to impose on the world that we are more deserving of this standard of living than they are. There are two ways of achieving that – economically, and militarily. Economically means we pay for the privilege, which is exactly what we are being forced to do. Don’t like it? Too bad – welcome to a world of 6 billion humans all equally deserving.
Brachiator
Since the actual amount raised from the 1980 windfalls profit tax was only $40 billion, I am not sure why you quote the 2004 inflation adjusted number for gross revenues. It is misleading to the point of irrelevance.
As with McCain’s misguided proposal of a gas tax holiday, anyone who advocates a windfall profits tax in the face of the documented failure of past taxes to achieve revenue goals has to come up with something better than “well, at least the oil companies will pay something.”
Well, no. Since “we” don’t own the oil companies, there are no “our losses” to recoup. This doesn’t even work if your suggestion is that a certain amount of tax revenues are always “due” from oil companies. Also, there is a whole tangle of oil industry deductions and credits (overhead, depletion allowances, R&D credits, etc) that go back long before Cheney was around.
Actually, demanding windfall profits taxes in the absence of a coherent revenue policy is just silly. It might also cause you to miss more rational tax changes that might accomplish what you are looking for.
And those who follow the link posted on the effect of the 1980 windfalls profits tax also have to deal with this little factoid:
Now I don’t think that a new tax would necessarily have the same impact on domestic production as the 1980 tax, but the larger point here is that you have to be careful of what you wish for when you impose a special surcharge because it will make you feel good, as opposed to actually achieving some revenue goal.
But don’t get me wrong, here. I don’t have any great love for oil companies. But windfall profits taxes will not result in any great actual windfall, nor will they produce a huge amount of money that can be invested in alternative energy research.
That’s funny. The price of gas in any area is pretty much the same despite the presence of Exxon and other supposed… what’s the word?… “competitors.” Yeah, that’s it. I’m sure that the oil companies get a laugh that anyone believes that they are competing with each other. Of course, since a cartel, OPEC, sets the price of a barrel of oil, and refinery costs and processes are similar, there is little reason that Exxon gas would ever much differ in price from some other company’s gas.
Again, taxes are not automatically passed on to consumers. For example, after the windfall profits tax was imposed in 1980, revenues from the tax and gas prices both declined, but for a significant portion of this same period, oil company profits rose.
Facts are pesky things. They rarely support the conventional wisdom.
Martin
That assumes collusion on the part of the oil companies. You do realize that the price of oil is set globally. I don’t think we’re in a position to put a windfall tax on Saudi Arabia just yet.
And if you assume collusion on the part of the oil companies, why can’t they just collude to charge $9 for gas now?
rachel
They can. It’s just that if they did, it would shcok our economy into a dead stop and fire up the alternative energy people. They want to put that off as long as they can.
But eventually, they will get around to charging that much, and probably more.
Chris Johnson
I don’t like the 1000$ bribe bit, we can’t simply give votes to whoever will pay the highest price for them. Come the fuck on.
I DO like the idea of a windfall profits tax- how about we tie it to subsidies? You can opt out of the windfall profits tax by NOT taking ANY subsidies.
rawshark
It’s not a windfall anyway. They spent millions getting to this point, their investment is paying off.
I do have a problem with billions of dollars not flowing in our economy though. That seems bad. If our economy is like a circulatory system and currency is the blood then shouldn’t we keep blood levels high as possible? Isn’t it healthier that way?
Ed Sanders
I don’t want to nitpick or anything, but do the media geniuses at Obama’s campaign understand how to do a pullback to show McCain with Bush, rather than pan to him. Jeebus.
darms
Martin, so it’s the drilling/extraction arm of Exxon-Mobil that is generating the amazing profits? (not arguing, just genuinely curious & damn, I hate my stupid spelling mistakes…)