House Votes to Rescind Oil Drillers’ Tax Breaks

[LaMidRighter]

Stinger, why shouldn't oil consumers pay for the pollution, terrorism, and wars that they cause?

Why should they? You are arguing social responsibility theory vs. economic law, all consumers are doing is participating in an open market. To decide the "fair share" of social responsibility, first you must define the amount of, extent of, and actual impact of the pollution, which is pretty much improbable at best with current scientific theories. Next, terrorists use all tools at it's disposal, so to punish consumers for something they neither condone nor knowingly participate in is not only harsh, but completely unfair. Finally, I have to adress this "war for oil" rhetoric, just like the WMD debate, the burden of proof is on the accuser, until you have something direct and concrete, it's a conspiracy theory and easily dimissable, but to further the idea of punishing consumers for these things, let's go ahead and have a general tax on food since there are wars fought over farmland, potable water, money(let's have a higher transaction fee) etc. we can find any cause for any war if we look hard enough.

 

[Kandahar]

Why should they? You are arguing social responsibility theory vs. economic law, all consumers are doing is participating in an open market.

It has nothing to do with social responsibility, it has to do with paying for all the costs associated with the product. Pollution is just as much of an expense as labor; it simply gets shifted to the public instead of the consumer/producer.

To decide the "fair share" of social responsibility, first you must define the amount of, extent of, and actual impact of the pollution, which is pretty much improbable at best with current scientific theories.

It doesn't have to be exact. An approximation of the cost is better than nothing at all.

Next, terrorists use all tools at it's disposal, so to punish consumers for something they neither condone nor knowingly participate in is not only harsh, but completely unfair.

No it isn't. Just because they don't intend to participate in terrorism doesn't mean that they aren't. Similarly, I'm sure that most people would choose not to pollute with oil if they had the choice. But they don't have that choice, and so they should pay the costs instead of making the general public pay for the costs.

Finally, I have to adress this "war for oil" rhetoric, just like the WMD debate, the burden of proof is on the accuser, until you have something direct and concrete, it's a conspiracy theory and easily dimissable, but to further the idea of punishing consumers for these things,

I'm not saying that we fight wars for the sole purpose of taking over oil fields. But it's undeniable that we wouldn't care nearly as much about the Middle East if there was no oil there. Why else would we possibly have intervened when Iraq invaded Kuwait? Would we have done the same if Senegal invaded The Gambia for its peanut crop? I think not.

let's go ahead and have a general tax on food since there are wars fought over farmland, potable water, money(let's have a higher transaction fee) etc. we can find any cause for any war if we look hard enough.

America does not routinely fight wars over farmland and water.

 

[LaMidRighter]

It has nothing to do with social responsibility, it has to do with paying for all the costs associated with the product. Pollution is just as much of an expense as labor; it simply gets shifted to the public instead of the consumer/producer.

i.e. social responsibility. Either way you look at it, the consumer pays, no business will just absorb the cost for the long term, as soon as the threshold is reached, prices go up, and consumers pay through increased costs, thus "social responsibility" as created by one side of the paradgm is an unnecesary penalty for participating in the market. Cleanup expenses remember, are mandated to the business and thus passed to the consumer.

It doesn't have to be exact. An approximation of the cost is better than nothing at all.

If you are on the side that comes out ahead I guess. All factors should be well known before assesing responsibility and the degree thereof.

No it isn't. Just because they don't intend to participate in terrorism doesn't mean that they aren't. Similarly, I'm sure that most people would choose not to pollute with oil if they had the choice. But they don't have that choice, and so they should pay the costs instead of making the general public pay for the costs.

We have a basic fundamental difference here, the fact is that oil is something that people currently need, thus, you are by using the theory of responsibility for these unknown variables, making it more difficult for consumers to fulfill that need.

I'm not saying that we fight wars for the sole purpose of taking over oil fields. But it's undeniable that we wouldn't care nearly as much about the Middle East if there was no oil there. Why else would we possibly have intervened when Iraq invaded Kuwait? Would we have done the same if Senegal invaded The Gambia for its peanut crop? I think not.

Kuwait and Saudia Arabia are our allies, for the sole purpose that we need their trade. If we needed peanuts and Gambia could provide them, then they too would be our allies and thus we would be obligated, if a treaty existed to defend them in mutual interest if that need presented itself in the future. The fact is that much of the middle east has in fact presented itself as a threat to us and we have an interest regardless of the percieved notion we must fight. We can get into the technicals all night long about how this is directly or indirectly related to oil, but somewhere we are both correct.

America does not routinely fight wars over farmland and water.

I realize that, it is merely an example to point out that every war is fought for something, many times that something is used by american consumers in one way or another, every rare commodity depending on location and need has a value based upon those principles. I am of the opinion that if we play the game of punishing consumers for their consumption we must look at all negatives to be fair.(BTW- I am against punishing consumers.)

 

[Iriemon]

Originally Posted by Iriemon
1. Higher prices at the pump encourage people to be more efficient. They will buy hybrids instead of Hummers

Really? I won't, because I have no need, want, or use for such worthless vehicles. Other coercive tactics have been aimed at consumer's wallets as well such as the gas guzzler tax, but sports cars, SUVs, and other high powered vehicles still are in high demand. Also, if someone is getting better mileage in a vehicle, they are likely to use it more, thus consuming the same amount of fuel over a given time period as the owner of the "evil" gas guzzler. Simple economic law, everything is in a state of flux, including supply and demand.

Whether you personally do or not is irrelevent. Time and again when relative gas price went up people became more efficient at using fuel. It has happened again receently.

Simple supply and demand.

Iriemon: 2. Because the price of oil based fuel is marginally higher, it makes other sources of energy more economically viable, further reducing our oil requirements.

Economically viable only when the consumer develops a need or want for it, as of right now, the technologies are inferior, performance wise to petroleum products, which is why oil is still in high demand.

Exactly right. And there will be a "need" for it when the cost of oil based fuel is marginally higher.

Iriemon: 3. We are using up ME oil instead of what is left of our own reserve.

Given tax breaks to produce more of our oil simply incentives folks to use more of our limited reserves faster, which may result in a short term benefit, but in the long term keeps us even more dependent on foreign oil.

With technological advancement and deeper reserves opening up, such as in the gulf of Mexico in my state, the limitations are not able to be accurately quantified and are always subject to change. moot point.

I've heard the claim. If it is a moot point, why are we importing so much oil?

 

[Iriemon]

...but to further the idea of punishing consumers for these things, let's go ahead and have a general tax on food since there are wars fought over farmland, potable water, money(let's have a higher transaction fee) etc. we can find any cause for any war if we look hard enough.

If we were not producing enough food and water in this country, and had to import lots of it, economically that would make sense.

 

[Iriemon]

Originally Posted by Iriemon
Thanks. That really explains your "bargaining theory."

Yes it does.

LOL, the sarcasm went right over your head, eh?

 

[Iriemon]

Cremaster77: As Iriemon has stated, increased oil prices (that the free market would dictate without government intervention) created economic incentive for more fuel efficiency and decreased demand. Decreased demand for foreign oil absolutely makes us more energy independent.

Spare me, I'm not very impressed with Iriemon's economic assertions. He doesn't even understand supply and demand.

Tell me do you really care or consider where it comes from when you are pumping it into your car? Does it run differently? There is plenty of oil we need to better position OUR domestic companies in the world market to insure that supply can't be used as a political and economic tool against us.

What does the source of oil have to do with the fact that higher prices increases efficiency?

If you increase supply as you propose the Govt continue to encourage, what would the the expected result on price?

If the price were to decrease, what would be the expected result in terms of demand and efficiency of use?

If there is greater inefficiency and use of oil taken from US reserves, what will be the effect on US oil reserves?

Awaiting your words of enlightment, oh supply and demand master.

But why have us at the mercy of the ME oil producers in the meantime especially since we will remain an oil based economy long after you and I are around.

So therefore, your solution is policies that encourage inefficiency and use up our reserves of this resources faster.

But the bottom line here is that this move by the Democrats was noting but political pandering and stupid.

No the bottom line is that the Bush Administration has been in bed with Big Oil from day 1 and fortunately the Democrats are reversing this shameless corporate welfare.

 

[LaMidRighter]

Whether you personally do or not is irrelevent. Time and again when relative gas price went up people became more efficient at using fuel. It has happened again receently.

Your point was that people would buy things they didn't want because of a necessity created by the rule of law(unnaturally), that is not the case. The other factor is that many people do not have a choice in their consumption options and thus they must absorb the price to use, efficiency only happens when a choice exists.

Exactly right. And there will be a "need" for it when the cost of oil based fuel is marginally higher.

what you are arguing results in a forced increase in the price, thus "creating" a need for something that is inefficient, thus not needed or wanted. In other words, the use of law to pass along prices to the consumer is in violation of basic economic principle.

I've heard the claim. If it is a moot point, why are we importing so much oil?

Government regulation throughout history has prohibited the market from effectively supplying the demand, thus an interruption of the natural order of a free market.

 

[LaMidRighter]

If we were not producing enough food and water in this country, and had to import lots of it, economically that would make sense.

The point was that the consumer should be held responsible for the bad things that happen because of the purchases they make. So, if you import the water it has to come from somewhere, let's say it came from a war-torn African country, then by that logic if one faction commits attrocities to collect the water or farmland because of it's increased value, then the unknowing consumer for some odd reason should foot the bill. Sorry, but it doesn't work that way.

 

[Iriemon]

Your point was that people would buy things they didn't want because of a necessity created by the rule of law(unnaturally), that is not the case. The other factor is that many people do not have a choice in their consumption options and thus they must absorb the price to use, efficiency only happens when a choice exists.

I didn't mean to imply that everyone drives their Hummer to the junkyard and picks up a hybrid in one day. But when fuel prices rise, sales of gas guzzlers plumment and fuel efficient cars rise. That is not speculation, it has happened repeatedly.

what you are arguing results in a forced increase in the price, thus "creating" a need for something that is inefficient, thus not needed or wanted. In other words, the use of law to pass along prices to the consumer is in violation of basic economic principle.

I agree. It would be more efficient to make oil as cheap as possible. But if the goal is to reduce our requirement of oil, that is the necessary action.

A few months ago the Saudi Arabian government came out arguing against fuel taxes, saying it would provide a regulated supply. Why do you think the Saudis would be against fuel taxes?

Government regulation throughout history has prohibited the market from effectively supplying the demand, thus an interruption of the natural order of a free market.

True -- and sometimes with a very positive result. Remeber Lake Erie in the 70s?

 

[Iriemon]

The point was that the consumer should be held responsible for the bad things that happen because of the purchases they make. So, if you import the water it has to come from somewhere, let's say it came from a war-torn African country, then by that logic if one faction commits attrocities to collect the water or farmland because of it's increased value, then the unknowing consumer for some odd reason should foot the bill. Sorry, but it doesn't work that way.

Don't follow.

 

[jfuh]

When you can get my name right we will continue, I have no interest in debating children.

You want respect? Than post something other than :spin:
Otherwise it's just running from the valid questions asked.

 

[Kandahar]

i.e. social responsibility. Either way you look at it, the consumer pays, no business will just absorb the cost for the long term, as soon as the threshold is reached, prices go up, and consumers pay through increased costs,

That's the idea. If consumers are going to buy products that pollute and cause terrorism, they should pay for them.

thus "social responsibility" as created by one side of the paradgm is an unnecesary penalty for participating in the market. Cleanup expenses remember, are mandated to the business and thus passed to the consumer.

Perhaps your definition of social responsibility differs from mine. I think of "social responsibility" as oil companies using their profits to fund Little League teams, not paying to clean up their own mess. That's just a basic expense.

If you are on the side that comes out ahead I guess. All factors should be well known before assesing responsibility and the degree thereof.

If there is no tax, it is the general public that pays the cost.

 

[LaMidRighter]

I didn't mean to imply that everyone drives their Hummer to the junkyard and picks up a hybrid in one day. But when fuel prices rise, sales of gas guzzlers plumment and fuel efficient cars rise. That is not speculation, it has happened repeatedly

. I get that, the point is that either a slow or rapid replacement of desired products for others that are not wanted still would take place. In other words, consumers would be forced to value a less desireable car just so that they can commute. There is also no guarantee that the more efficient car will burn less gas in it's lifetime because of the fact that drivers will want to use those "extra" miles since it is less punitive to do so.

I agree. It would be more efficient to make oil as cheap as possible. But if the goal is to reduce our requirement of oil, that is the necessary action.

I disagree, once technology catches up to the reality of the situation, the market would embrace it.

A few months ago the Saudi Arabian government came out arguing against fuel taxes, saying it would provide a regulated supply. Why do you think the Saudis would be against fuel taxes?

I can understand why they would want consumers to use more of their product, more need requires more movement in the supply, that's a normal response in business. I am against more taxes of this nature with no interest economically because I believe that they exist only as a source for government and special interests to impose their specific will on other people.

 

[LaMidRighter]

Don't follow.

Sorry, Khandahar was arguing that consumers should pay more because of the negatives that come from the commodity of oil regardless of their knowledge of them. I am arguing that if you wanted to use that logic it could be extended elsewhere.

 

[Kandahar]

Sorry, Khandahar was arguing that consumers should pay more because of the negatives that come from the commodity of oil regardless of their knowledge of them. I am arguing that if you wanted to use that logic it could be extended elsewhere.

I do think that producers/consumers should pay for externalities, in as much as it's feasible to measure them, instead of making the general public pay for them. The fact that they generally don't do so for other products is no reason that they shouldn't have to for oil. That would be analogous to saying that since many people litter and aren't caught, I should be able to dump several truckloads of waste into the local reservoir.

 

[LaMidRighter]

That's the idea. If consumers are going to buy products that pollute and cause terrorism, they should pay for them.

Then they would pay for them two to three times over if not more. First, the real value, then the value that comes from all other associated costs from production, then taxes(after those paid during production), then a tax assesed on the market value of the product. Sounds like a nice way to justify robbery to me.

Perhaps your definition of social responsibility differs from mine. I think of "social responsibility" as oil companies using their profits to fund Little League teams, not paying to clean up their own mess. That's just a basic expense.

Social responsibility is the theory that ethically a company owes the general public something outside of it's responsibility to the shareholders and consumers of said product. "Cleaning up their own mess" is also a point for debate, where does their mess start exactly? And to what logical conclusion is it no longer the suppliers doing. Sounds like you want to hold the companies responsible for the entire consumption chain, even thought the actual impact is not capable of being exactly known.

If there is no tax, it is the general public that pays the cost.

I don't think you got my last point. The public pays for all costs anyway, so adding to the cost of production will land on the consumer.

 

[LaMidRighter]

I do think that producers/consumers should pay for externalities, in as much as it's feasible to measure them, instead of making the general public pay for them. The fact that they generally don't do so for other products is no reason that they shouldn't have to for oil. That would be analogous to saying that since many people litter and aren't caught, I should be able to dump several truckloads of waste into the local reservoir.

Fine, then let's not stop at oil. Let's charge every company for all ill effects of their products, including food producers, tobacco companies, service sectors, everybody. All products can be harmful, so let's pass the buck along to the companies, which WILL land back on the consumers heads.

 

[Kandahar]

Fine, then let's not stop at oil. Let's charge every company for all ill effects of their products, including food producers, tobacco companies, service sectors, everybody. All products can be harmful, so let's pass the buck along to the companies, which WILL land back on the consumers heads.

Better the consumers than the general public.


Very few (if any) industries have as many externalities as the oil industry though, so I don't think this would be as expensive to consumers (in other industries) as you imagine. In fact, most of the externalities of other industries come from their use of oil.

 

[LaMidRighter]

Better the consumers than the general public.

Who do you think the consumers are?

Very few industries have as many externalities as the oil industry though. In fact, most of the externalities of other industries come from their use of oil.

Not the point, the fact is that everything suggesting the oil companies or any others owe the public a damn thing past profit, jobs, and quality are exactly against the free market theory and the concept of liberty this country were founded on.

 

[Kandahar]

Who do you think the consumers are?

The people who buy oil (or whatever product).

Not the point, the fact is that everything suggesting the oil companies or any others owe the public a damn thing past profit, jobs, and quality are exactly against the free market theory and the concept of liberty this country were founded on.

That's not a free market, that's a free-for-all. A company passing its expenses on to the general public is really no different than a company stealing from the general public. Surely you wouldn't consider THAT to be part of free market theory.

I completely agree that a company's obligations are to make money for its shareholders, within the bounds of the law. I'm simply suggesting that they should be required by law to pay for their own expenses instead of making the general taxpayers do it.

 

[LaMidRighter]

The people who buy oil (or whatever product).

The fact is that somewhere down the line even a portion of most alternative fuels have been created using a petroleum product, so, like it or not, the general public are all petroleum consumers. This is the case if you use electricity, mass transit, flex-fuel(something had to provide the BTU's to convert the base product), and so on. BTW, if you own one product that has plastic, you are a consumer of oil.

That's not a free market, that's a free-for-all. A company passing its expenses on to the general public is really no different than a company stealing from the general public. Surely you wouldn't consider THAT to be part of free market theory.

Then every company has historically stolen by that logic. If you want to participate on the consumer side of the market, you agree to pay through transaction all costs associated with production, including taxes. You may not know that you are agreeing to this "contract" but if you don't tell the provider to "shove it" by not purchasing, you assume the final overall cost.

I completely agree that a company's obligations are to make money for its shareholders, within the bounds of the law. I'm simply suggesting that they should be required by law to pay for their own expenses instead of making the general taxpayers do it.

You're still going to pay taxes, and you will also pay more for the product. Laws are arbitrary, economics are not.

 

[Kandahar]

The fact is that somewhere down the line even a portion of most alternative fuels have been created using a petroleum product, so, like it or not, the general public are all petroleum consumers. This is the case if you use electricity, mass transit, flex-fuel(something had to provide the BTU's to convert the base product), and so on. BTW, if you own one product that has plastic, you are a consumer of oil.

I know. And if we have a consumption tax on gasoline or a direct tax on oil companies, then those other industries will have slightly higher prices themselves as a result of slightly higher expenses. What is the problem with this? They're paying for their own mess.

Then every company has historically stolen by that logic. If you want to participate on the consumer side of the market, you agree to pay through transaction all costs associated with production, including taxes. You may not know that you are agreeing to this "contract" but if you don't tell the provider to "shove it" by not purchasing, you assume the final overall cost.

I'm aware that the consumers assume the final overall cost. I simply fail to see anything wrong with this. You seem to have no problem forcing the general public to assume the cost, for something that they had nothing to do with. How does THAT fit in with free market theory?

You're still going to pay taxes, and you will also pay more for the product. Laws are arbitrary, economics are not.

Suppose that Acme Widget Company dumps waste into the local lake. Which is more fair: To make everyone in the area pay for the cleanup, or to make Acme Widget Company pay for the cleanup? If the company pays its own expenses, then that means less tax money from the general public will be wasted on the cleanup.

 

[LaMidRighter]

I know. And if we have a consumption tax on gasoline or a direct tax on oil companies, then those other industries will have slightly higher prices themselves as a result of slightly higher expenses. What is the problem with this? They're paying for their own mess.



I'm aware that the consumers assume the final overall cost. I simply fail to see anything wrong with this. You seem to have no problem forcing the general public to assume the cost, for something that they had nothing to do with. How does THAT fit in with free market theory?



Suppose that Acme Widget Company dumps waste into the local lake. Which is more fair: To make everyone in the area pay for the cleanup, or to make Acme Widget Company pay for the cleanup? If the company pays its own expenses, then that means less tax money from the general public will be wasted on the cleanup.

The overall point I am trying to make is that some of the public are perfectly fine with empowering government to arbitrate economic law for a gamut of reasons. The side effect is that of the slippery slope, while the concept is becoming cliche it is appropriate, the more you let government regulate, the more authority it assumes, while this instance can be argued well from both sides, eventually the only winner is big government. Either way you will pay taxes and you will still pay cost increases, all because we allow our elected officials to penalize sides we don't agree with. I hope this is making sense, I am half asleep right now. Small personal victories open the door to large future losses, politics, like economics operate in a pendulum and eventually everyone's choices are going to be up for government scrutiny.

 

[danarhea]

At the point, let me interject, and thank both Kandahar and LAMidRighter for a very stimulating debate. I do have a few things to say on this, but am holding off, because this ongoing debate between you 2 is one of the best of the year. Sometimes, it is appropriate to join the peanut gallery, and this is one of those times. Great job, guys.