http://www.cnn.com/2006/POLITICS/04/29
After reading this article on CNN.com(sorry Stephen and Pat), I was a little confused. I don't have much time to keep up with business, politics, etc. , so sorry if I sound uninformed. In this article, they talk about how the oil industry is getting tax breaks. I thought that the act in question was whether or not to put a "windfall" tax(not really sure what that means) on the profits of the oil company. My point is that the article makes it seem like the "Bush-meister" is actively lowering their taxes rather than leaving the market alone(which is what I thought he was doing). Tell me where I'm wrong. If this is the case then CNN once again proves that they are quite the Spin Doctors, and I am not talking about the guys who wrote "Little Miss".
2 comments:
Good question. I'm not exactly sure what this year's tax bill looks like, and I doubt even most congressman know either, because our current tax code is a gazillion pages long and the system is ridiculously out of control.
Every politician works as hard as possible to get a break for this or that big corporation that is lobbying for them, and so we unfortunately have a system that plays favorites. So if you're a big corporation, you probably get breaks somewhere or another.
American oil companies have probably gotten breaks for years, just like Coke and GM probably do. Congress is the one responsible for giving out these breaks, and this has been going on for decades. It's not something Bush has directly brought about.
Anyway, the current debate is whether to put a windfall profits tax on the big firms like Exxon, Shell, etc. There are both Democrats and Republicans that support this, because it appeals to Joe Sixpack and it's an election year. The tax would basically force these companies to give a much larger share of their profits to the federal gov't (which, lord knows, does an excellent job of wisely spending money).
As I've argued a million times before, I think this proposal would be disastrously counterproductive, because it gives oil companies less incentive to produce more oil. Also, it further feeds the federal government's growth by giving it even more money to waste on bridges to nowhere in Alaska.
We tried the windfall profits tax in the late 1970s, and it was a nightmare. Prices spiraled even higher as energy companies simply gave up looking for more oil because it was pointless.
I think the best way to deal w/ rising gas prices is to let these companies, most of which were deeply in debt in the mid to late 90s when oil was $10 per barrel, make their fat profits. This will induce all the investment in the future production we'll need, and in about 5-8 years, I bet oil/gas/ethanol/clean coal/whatever the hell we use will be cheap as hell again. Evidence that the market is starting to work itself out is already beginning to come in, as illustrated by this article.
Stephen and TC, if I've missed anything, have at it.
SUPPLY AND DEMAND!!!
Well if Jimmy Carter supported a windfall tax then it must be smart. By the way, me and Joe Sixpack are drinking Keystone Light and watching 12th round NFL Draft coverage if anybody wants to come over. He is a big Steelers fan.
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