Price Gouging Oil Companies Should Pay A Windfall Tax = Bring it on!

[US&THEM]

You didn't answer. If they have a bad year, below a "fair profit" are you willing to subsidize them to give them a fair profit?

“If” never happens.

 

[Helix]

We need a more effective public sector energy production competitor, IMO. Basically, a not for profit entity that can step up production in times of crisis and steer the market towards less fossil fuel dependent energy sources.

 

[noonereal]

Price Gouging Oil Companies Should Pay A Windfall Tax = Bring it on!​

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Bullshit, Excess profits should be confiscated. Salaries capped by law and bonuses abolished.

 

[Metric Mouse]

Russia supplies up to 3% of our oil, yet after the sanctions gas prices went up 25%. Seems legit.

It's almost as if oil is traded on a global market...

 

[Simpletruther]

Perhaps a consideration. But only after the government stops giving them tens of billions of dollars every year regardless of profit margins.

“If” never happens.

Really, so what is a fair profit?

 

[Ug make hammer]

Why bother then it will be a wash anyway?

"Why bother" barely scratches the surface of how I feel about corporations being able to write off one year's losses on the following years' taxes. It only makes sense for startups, who need to run losses for a few years, but even then it's pretty questionable. If they aren't obviously bound for failure (the IRS can't make this judgement but investors can) then they can simply borrow to cover losses, or issue more stock.

Compensating corporations that are already well established, for making losses does not make even economic sense. If they have no assets to sell, then they're bankrupt and have to go.

 

[Ug make hammer]

It's almost as if oil is traded on a global market...

Oil exporting nations (with sufficient refinery capacity) can actually fix their domestic price lower than the world price. But I guess that requires government owned industry or at least a government-owned competitor in the local industry.

In any case, the US market is so huge compared to the import or export of oil, it does not function like a major oil exporter does. Look on the bright side though: it doesn't function like a major oil importer either.

Gasoline prices around the world, 05-Feb-2024 | GlobalPetrolPrices.com

Gas prices by country using official data sources.

www.globalpetrolprices.com

Europeans pay much more, in some cases twice as much.

 

[Simpletruther]

"Why bother" barely scratches the surface of how I feel about corporations being able to write off one year's losses on the following years' taxes. It only makes sense for startups, who need to run losses for a few years, but even then it's pretty questionable. If they aren't obviously bound for failure (the IRS can't make this judgement but investors can) then they can simply borrow to cover losses, or issue more stock.

Compensating corporations that are already well established, for making losses does not make even economic sense. If they have no assets to sell, then they're bankrupt and have to go.

But if you tax away "extra" profits, then how will they make up for bad years?

 

[Ug make hammer]

But if you tax away "extra" profits, then how will they make up for bad years?

We're talking about 21% tax on profits here. They have plenty of chance to "make up" to their shareholders with the remaining 79%.

 

[code1211]

Big oil is exploiting their customers daily by using the Invasion as an excuse.

If anyone offers anything for sale and people pay the price advertised, that is commerce.

When the value decreases, the price decreases.

This is pretty basic stuff.

 

[Ug make hammer]

If anyone offers anything for sale and people pay the price advertised, that is commerce.

When the value decreases, the price decreases.

This is pretty basic stuff.

With a domestic source of oil at the same price as before, why do none of those companies undercut the other?

I'm pretty sure US prices only ever go down to keep foreign competitors out of the US market. That's cartel behaviour, and the Federal government should bust it.

 

[US&THEM]

If anyone offers anything for sale and people pay the price advertised, that is commerce.

When the value decreases, the price decreases.

This is pretty basic stuff.

OPEC and OPEC your basic stuff doesn’t apply to them.

 

[Jay59]

Even before Vladimir Putin’s invasion of Ukraine shocked energy markets and sent oil prices to over $100 a barrel, Exxon was banking obscene profits. On February 1, the Texas-based fossil fuel giant announced profits of almost $9 billion for the fourth quarter of 2021—its biggest take in seven years,

Exxon didn’t have to party alone; Chevron, Shell, and BP were announcing surpluses of only slightly less startling proportions.

“Combined, the four companies raked in $24.4 billion in quarter four of 2021, bringing their total profits for last year to over $75.5 billion. Chevron, Shell, BP, and Exxon used these bloated profits to shower billions onto their shareholders—including their wealthy executives whose salaries are heavily padded with stocks,” reported the watchdog group Accountability.US.

“In 2021, the four companies bought back over $6.6 billion in stocks while hiking up their dividends. And the oil giants are planning for an ‘even better’ 2022 for shareholders, with plans already in place to buyback over $22 billion in stock thanks to high oil prices.”

In fact, 2022 could be dramatically better for Exxon and the other major oil companies.

Price-Gouging Oil Companies Need to Pay a Windfall Tax

Prices at the pump are shooting up as oil companies turn massive profits. A windfall-profits tax could go a long way toward providing relief for working families.

www.thenation.com

Do you understand that this is a tariff?

It's against our own companies so it's known as a reverse tariff. It has been done before under similar circumstances with disastrous results.

Crude Oil Windfall Profit Tax Act of 1980 - Wikipedia

en.wikipedia.org

OPEC and OPEC your basic stuff doesn’t apply to them.

Don't be naive.

 

[US&THEM]

Don't be naive.

Saudi Arabia understands how to manipulate supply and demand, that is not naive that is being real.

 

[Ug make hammer]

Do you understand that this is a tariff?

It's against our own companies so it's known as a reverse tariff. It has been done before under similar circumstances with disastrous results.

Crude Oil Windfall Profit Tax Act of 1980 - Wikipedia

en.wikipedia.org

A tax on profits is a tariff?

What you linked to was a tariff ON CRUDE OIL, and because it could be expected to increase imports (from the Middle East at that time) due to their lower extraction costs, it would be a bad idea now.

A tax on profits (ie corporate tax) does not have any of those effects. I doubt it would even lower fuel prices, it would just be a revenue source.

 

[Ug make hammer]

Saudi Arabia understands how to manipulate supply and demand, that is not naive that is being real.

After OPEC held the West "at the point of a pump" the US oil majors prospected and sometimes drilled in far more places around the world. OPEC's monopoly power is considerably reduced now: there are other sources who can increase their output to take advantage of (and drive down) any OPEC-fixed price. Trying to quadruple the price of crude oil as they did then, wouldn't work now.

US domestic fracking was a big part of this, of course, but it's not the only country.

Seen from OPEC's point of view, proving reserves elsewhere is almost as alarming as actually drilling them.

 

[US&THEM]

After OPEC held the West "at the point of a pump" the US oil majors prospected and sometimes drilled in far more places around the world. OPEC's monopoly power is considerably reduced now: there are other sources who can increase their output to take advantage of (and drive down) any OPEC-fixed price. Trying to quadruple the price of crude oil as they did then, wouldn't work now.

US domestic fracking was a big part of this, of course, but it's not the only country.

Seen from OPEC's point of view, proving reserves elsewhere is almost as alarming as actually drilling them.

“OPEC’s Monopoly”

 

[Geoist]

Even before Vladimir Putin’s invasion of Ukraine shocked energy markets and sent oil prices to over $100 a barrel, Exxon was banking obscene profits. On February 1, the Texas-based fossil fuel giant announced profits of almost $9 billion for the fourth quarter of 2021—its biggest take in seven years.​

Exxon didn’t have to party alone; Chevron, Shell, and BP were announcing surpluses of only slightly less startling proportions.

“Combined, the four companies raked in $24.4 billion in quarter four of 2021, bringing their total profits for last year to over $75.5 billion. Chevron, Shell, BP, and Exxon used these bloated profits to shower billions onto their shareholders—including their wealthy executives whose salaries are heavily padded with stocks,” reported the watchdog group Accountability.US.

“In 2021, the four companies bought back over $6.6 billion in stocks while hiking up their dividends. And the oil giants are planning for an ‘even better’ 2022 for shareholders, with plans already in place to buyback over $22 billion in stock thanks to high oil prices.”

In fact, 2022 could be dramatically better for Exxon and the other major oil companies.

Price-Gouging Oil Companies Need to Pay a Windfall Tax

Prices at the pump are shooting up as oil companies turn massive profits. A windfall-profits tax could go a long way toward providing relief for working families.

www.thenation.com

America needs a nationwide version of the Alaska Permanent Fund.

 

[Ug make hammer]

“OPEC’s Monopoly”

The math in this thing is over my head, but it does have a handy graph to illustrate my point.



Note that non-OPEC production did not need to exceed OPEC production by much, to break their monopoly.

 

[US&THEM]

The math in this thing is over my head, but it does have a handy graph to illustrate my point.

View attachment 67379997

Note that non-OPEC production did not need to exceed OPEC production by much, to break their monopoly.

The non-OPEC members def do not want to upset OPEC.

 

[Jay59]

Saudi Arabia understands how to manipulate supply and demand, that is not naive that is being real.

You say that like you understand that supply and demand do affect the Arabs. Why did you say that it didn't?

A tax on profits is a tariff?

What you linked to was a tariff ON CRUDE OIL, and because it could be expected to increase imports (from the Middle East at that time) due to their lower extraction costs, it would be a bad idea now.

A tax on profits (ie corporate tax) does not have any of those effects. I doubt it would even lower fuel prices, it would just be a revenue source.

A reverse tariff. It taxes the profits of US companies and not those of foreign companies.

The link showed a tax on profits related to crude oil production but it is still a tax on profits. The comparison is unusually close since it is the same industry, but it could easily apply to orange juice or industrial grit. The underlying product is irrelevant. Only the cash flow counts.

 

[KLATTU]

This post reminds me of the incredibly naive views left winger have of how for-profit companies work. Or maybe more like idealistic. But certainly not realistic.
Company execs at for profit companies don't sit around and wonder " who can we best serve the common good'. That's what non-profits and Governments do.
Ironically, even though they DON't have that as their primary goal, they accomplish it!
That's why gas and and groceries have been provided to consumers at incredibly low prices for decades,

 

[US&THEM]

You say that like you understand that supply and demand do affect the Arabs. Why did you say that it didn't?

What part of “manipulate” do you not understand?

 

[Cardinal]

It's almost as if oil is traded on a global market...

Oil has fallen to $100/barrel.

 

[Jay59]

What part of “manipulate” do you not understand?

I understand that you are weaseling. First, you say that supply/demand does not apply to the Saudis. Next, you say that they can manipulate supply/demand. Which is it because it cannot be both?