Wednesday, April 26, 2006
Oil Company Windfall Profits Tax (Again)
Among the most predictable events are the cries by politicians and consumer-protection activists every time the oil companies earn high profits. One such instance just emailed to me is tied to a fund-raising effort by the American Family Association, whoever they are. They may do good works, but from what I've seen in this effort, they are just opportunistic money grubbers, preying on their members concerns about higher costs to get donations. My outrage caused me to send them the following:
Since 1977 our governments have collected more than twice as much in taxes than the oil companies combined have made in profits (courtesy TaxProf Blog), so why are you trying to get people upset with the oil companies? The oil companies take risks, make investments, drill dry wells, employ thousands, and answer to shareholders, while the government just sits back and collects the really big money, and then gripes when the oil companies occasionally make big profits. Notice the government wants more taxes when the oil companies do well, yet keep taxes high and even raise them when the oil companies are doing poorly. The oil companies have cut gas prices many times, but when has the government cut gas taxes?
I know Americans love to demagogue big business, mostly because Americans are very ignorant about both business and the taxes they pay. Most Americans think that businesses pay taxes, which shows how ignorant they are even of basic accounting. The money to pay business taxes come from us, the ultimate consumers of goods and services. To the businesses, taxes are just another element of their costs of doing business, and are passed on to the consumer. In essence, each business acts as a tax collector, and helps the government hide their true tax bite. The only exception to this is when a business is operating at a loss, in which case property taxes, payroll taxes, and other non-income taxes come out of the business' hide and bring about its failure that much more quickly.
If you were truly pro-family, you would give your subscribers useful information instead of trying to jump on the high cost of gasoline bandwagon to help your fundraising.
Shame on you.
Update: Since I posted this last week, our politicians raced to show that they are not only stupid, they are stupidly creative! What they were smoking/drinking/injecting when they came up with the idea of the $100 tax rebate because of gas price increases I do not know, but I wish I did so I would be sure never to touch the stuff. Hillbilly White Trash has excellent commentary on what, in a rational world, would be a nonissue.