When a company charges as much as possible for its products, with nothing but consumer demand holding prices in check, does this constitute a crime? Not according to Attorney General Bill Sorrell, (D-VT), who said: "Unless the government comes in and regulates pricing, then ... charging prices now that consumers will pay -- reluctantly-- is not on its face illegal."
The obviousness of this should not need mention, yet our legislators are hard at work to punish "Big Oil" for having the audacity to make a profit. After all everybody knows, "the oil companies are making huge profits while the rest of us are scraping by to fill our cars with gas."
"It is causing harm to our citizens," says Sen. Bobby Starr, (D-Essex/Orleans).
To remedy this harm, the leaders would like to institute windfall tax. However, for some reason they've got the misguided notion that the oil companies are the ones making the windfall profit. According to a story in CNN money "Exxon made $40 billion in 2007, a 60% increase from 2004 [and] paid $100 billion in taxes and royalties." So, it would seem there already is a "windfall" tax - windfall tax revenue that is.
Furthermore, According to the National Petroleum Institute, all of the Independently Owned Companies, (IOCs), combined, own only 6% of the proven reserves out there. The real benefactors of the high prices (besides the government itself) are the Foreign National Corporations (NOCs) which own approximately 77% of the world's reserves. The five largest countries, Saudi Arabia, Iran, Kuwait, Abu Dhabi (UAE),and Venezuela, collectively own 53.31% of the world's reserves. Completely disregarding this, assume the 6% stakeholders are the ones making an un-just profit (whatever that is) and see who would benefit from this. The Bush family? Big Texas oil barons? Wrong, the chart bellow show the distribution of IOC ownership.
Hum. Looks like "Big Oil" is owned by - well, by us, the
people. And the profits benefit mostly us, the people. Unless of
course you've been betting against oil? And you don't have an IRA, or a
pension, or any shares in a mutual fund. Most Vermonter's are insiders
on the truth of peak oil and Al Gore and would never bet against oil...
never ... so now that we've all gotten fat on oil profits, the State
wants to come along and cut itself a piece, as if it doesn't already
take more than its fair share. And speaking of fair shares, lets take a
look at the actual distribution of an oil dollar:
Government has total control over 15% of the price of fuel. Therefore, a reduction in taxes would be an immediate reduction in the cost at the pump. In addition there are corporate income taxes paid in the refining and retailing categories, further increasing the government control over prices. If our legislators are serious about helping all the people being "injured" be the price of oil, then they should -- by all means -- do everything in their power to reduce this price. Everything.
After I saw the feel-good talking heads spouting off on the evening news I checked my monitoring equipment and saw that my BS meter was broken. Darn, time to get a new one.
Posted by: Lazarus Long | April 04, 2008 at 02:08 PM