Government wants to tax oil industry profits

"I might be an accident, but taxes are not." Richard Tolleson, b.1961

Rep. Paul E. Kanjorski, who chairs the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, a powerful man in congress, has a history of trying to micromanage the markets. He was one of the Marxists who helped create the housing and credit crisis by promoting easy credit for high risk borrowers. http://tinyurl.com/69dd7x Now Kanjorski wants to tax the oil industry. (See below)

Hear we go again, more fascism. They never learn. Taxing excess profits was the same excuse used to tax excess income when they started the income tax. They were only going to tax the rich! Envy and greed affects all of us. If he can tax the oil industry, which industry's profits will he tax next?

Millions of people own stock in Exxon Mobile through 401ks, mutual funds, or as private investors. A lady who retired in 1998 might have bought Exxon Mobile stock for the dividend income of $0.82. Had she bought a 1000 shares at the average price of $33 per share in 1998 she would have had income of $820. Because of dividend increases over the past ten years, the dividend in 2008 will be $1.60 per share. Our retiree would now receive $1600 per year in dividends on her original purchase of 1000 shares. This would be a 97% increase in income over 11 years! The yield on her original purchase of $33,000 in 1998 would have grown from 2.48% to 4.84%! Now people like Paul Kanjorski want to confiscate money from millions of investors, denying seniors and others profits for dividends. Kanjorski takes no risk. Seniors and other investors take the risks. Kanjorski is just like the mob, wanting a cut from the production of others.

Now they want to tax oil companies' profits because they are "excessive". This is more legal plunder by someone who has never owned a business. If he had he would know the integrated oil companies' profits of 9.6% is not excessive. He would also know there are many other industries with higher profit margins.

If one removes three zeroes from the revenues of Exxon Mobile's past 12 months of revenue you would have $361,000,000. If you removed three zeroes from the profits of the past 12 months you would have $73,000,000. Now it hardly seems excessive.

Higher oil profits means there will be opportunities for alternate power sources; hydrogen, fuel cells, electric, etc. Higher profits justify the added expense of drilling deeper wells and drilling offshore wells. To some people, higher fuel prices also justify having an ocean view untarnished with an oil rig.

The unseen benefits of high fuel prices will be the desire to find cheaper resources. That has always happened in a free market.

Another unseen benefit will be the reduction in damage done to the government roads as people drive less.

The most important unseen benefit will be the savings of thousands of lives in car accidents because people will drive less, and drive slower.

Our freedoms were not threatened by the North Korean atheists. They were not threatened by the North Vietnamese atheists. They are not threatened by the Muslim terrorists. Our freedoms are threatened by people like Paul Kanjorski, and the voters who vote for people like him, who give up our freedoms, slowly, one election at a time.

Charles Tolleson

http://www.taxfoundation.org/blog/show/23183.html
May 4, 2008
Congressman Proposes that Government Establish a "Reasonable Profits Board"
by Gerald Prante
The current high price of gas has led to a lot of crazy proposals from gas tax holidays to creating a tax deduction based upon energy consumption. But Rep. Paul Kanjorski's (D-PA) may top them all in terms of its stupidity. From the Times Leader, Kanjorski's plan would do the following:
• H.R. 5800 would tax industries’ windfall profits.
• The bill would set up a Reasonable Profits Board to determine when these companies’ profits are in excess, and then tax them on those windfall profits.
• As oil and gas companies’ windfall profits increase, so would the tax rate for those companies.
• Kanjorski said his legislation will encourage oil companies to lower prices to prevent them from receiving higher tax rates.