Why not simply create tax incentives to allow companies to offer more telecommuting ?

If less people had to drive to work everyday = less gasoline consumption. It also means less congestion on the roads and less wear on infrastructure. So it is a win win all around. Sure not all jobs in the US can be done by telecommuting but a huge % can be. It would also help promote increased broadband access for folks as well.

It seems to simple there must be a "catch" but I am just not seeing it.

Vacaboi:
On the other hand, there are a number of competing oil companies. Even if they wanted to conspire to artificially raise oil prices and reap unearned windfall profits, they couldn't do so for any length of time. The real world just doesn't work that way. Why it doesn't work that way. (new window)


So you're saying OPEC will break down any day now?

Or is that a stable cartel?

If you're a rational businessman, why haven't you already done B?

There is this thing called competition. you can raise your prices to any level you want..but if your cometition doesn't..you get farked.

But ince this action willa ffect everyone, all of the competiton will be acting in a similar manner.

fight club: The problem with philosophical arguements is they are not pratical when dealing with the realities of the world. While I agree with you on a philosophical level, it is a pointless arguement. It is only valid if the realities of national security and the economy are unimportant. Kind of like trying to explain 'the allegory of the cave' to someone while they are stealing your shiat. While you may be right on a philosophical level that its only your perception that they are taking your shiat, the reality is that they just took your shiat.

bullshiat. This is a discussion about economics. I tend to think that most economists with PHD's know what the Fark they are talking about. Do you argue with your medical doctor before he operates? Why would you argue with an economist with a PHD? Most of these economists and noble laureates from Friedman to Becker can agree on basics. If you can't see the difference between philosophy and economics, maybe you should ask for help.

the_real_muppet: FlashHarry: then again, my brother in the UK pays about $8/gallon, so who am i to complain?

Your brother in the UK also has access, on average, to MUCH better public transportation than most of his peers in the US.

THIS.

That check everyone is supposed to get back from the government is gunna just go right to the oil companies, if you think about it...

Who knows how much higher gas prices will go. CAN WE PLEASE WEEN OFF OIL!!!!!! We have the technology, but we refuse.

//doesn't pity soccer mom SUV drivers, though.

<i>Why not simply create tax incentives to allow companies to offer more telecommuting ?

Ie, the taxpayers pay out money to allow some companies with lobbyig connectiosn to get more money, while those with jobs that just don't work in the telecommuting model (like..most jobs) get nothign out of it.


So it is a win win all around. Sure not all jobs in the US can be done by telecommuting but a huge % can be.


You know, where do you think everyoen works at? If your thought is 'in a cublicle', you need to get out more.

incrdbil: If you're a rational businessman, why haven't you already done B?

There is this thing called competition. you can raise your prices to any level you want..but if your cometition doesn't..you get farked.

But ince this action willa ffect everyone, all of the competiton will be acting in a similar manner.

Except that a hegemon (like Exxon-Mobil who controls 40% of the market) can raise prices and all the other companies will follow.

Further, if competition is preventing them from raising prices... competition will prevent them from raising prices. The competition doesn't magically disappear if taxes go up a little.

Telos

You could have easily said that increased taxes create a barrier to entry therefore reducing the number of suppliers.

That wasnt my point at all. It isnt about barriers to entry. Its about how much is supplied at different price points. The industy (whether just Exxon or 5000 companies) will provide more oil at higher prices and will provide less at lower prices. Taxes shift this curve.

Pocket Ninja [TotalFark] Quote 2008-02-28 07:43:48 AM
dead: and using the money for dubious purposes rather than reducing debt and,

Yeah. Dubious purposes like funding research into alternative energy, which might ultimately hurt the profit margins of said oil companies.


Like the government will actually do that. Our health is so much better with all those billions in tobacco settlement money.

Telos

Except that a hegemon (like Exxon-Mobil who controls 40% of the market) can raise prices and all the other companies will follow.

Except they cant. Why do you think pricing have been bouncing up and down 20+ cents all the time? Its because there is enough competition to make them compete. There are few enough to let them hold margins at 10% instead of 5% that it might be if there were more companies, but Exxon cant just hold there prices at $3.20 a gallon when everyone else is selling at $2.80.

Telos: So you're saying OPEC will break down any day now?

Or is that a stable cartel?

OPEC is a dysfunctional club of lucky autocrats. That doesn't make their efforts at collusion any more effective. Yes, they're sitting on liquid gold, but that would be the case whether or not they were able to run a successful cartel. Simply having the club proves nothing.

Telos


Further, if competition is preventing them from raising prices... competition will prevent them from raising prices. The competition doesn't magically disappear if taxes go up a little.


Ive already covered this, but let me try again. The competition's taxes go up too. Thus, the ENTIRE supply curve shifts to reflect the taxes. This causes the equilibrium point, which is the intersection of the supply and demand curve to change. Q2 is lower than Q1. P2 is higher than P1. P1 in initial price, Q1 initial quanity, P2 and Q2 final price and quantity.

Ok, so the competition's taxes go up to. Since everyone's taxes went up, everyone knows they can raise the price the same amount to compensate.

But no one guy is going to say "I can leave my prices the same and gain more market share?"

kindms: Why not simply create tax incentives to allow companies to offer more telecommuting ?

If less people had to drive to work everyday = less gasoline consumption. It also means less congestion on the roads and less wear on infrastructure.

This might not be a bad idea depending on what you are trying to accomplish. If you are trying to impact the price of gasoline you will fail. If you are trying to reduce congestion and wear on infrastructure, then I suspect it would work

Tjos Weel: Telos


Further, if competition is preventing them from raising prices... competition will prevent them from raising prices. The competition doesn't magically disappear if taxes go up a little.


Ive already covered this, but let me try again. The competition's taxes go up too. Thus, the ENTIRE supply curve shifts to reflect the taxes. This causes the equilibrium point, which is the intersection of the supply and demand curve to change. Q2 is lower than Q1. P2 is higher than P1. P1 in initial price, Q1 initial quanity, P2 and Q2 final price and quantity.

I'm impressed. You did that without a pie chart or cartoonishly big ears.

BTW, Telos, this is Econ 101 (or 102, if Macro was taught as 101 at your Alma Mater). You can try to debate Tjos Weel on this, but I don't see you giving us some earth-shattering insight that will overturn all of mainstream economic theory.

As far as I can tell, there is no plan to give a rebate to the companies if their profits fall below a desired level.

The plan is to send this message to investors, including retirees and pension funds: "Yes, we want you to risk billions of dollars exploring for, producing and refining oil and processing gas. But if you succeed for any reason, and even if no price-fixing is found, we will punish you for it."

The human instinct of envy (the only one of the "seven deadly sins" that has no possibility of any reward) demands that we get some licks in against people who are doing well, even if we are doing only slightly less well ourselves. But economies built on the politics of envy are never successful.

The pendulum is swinging back to the politics of envy. The results will be similar. Which profitable business that people love to hate is next? Cable companies? Cell phone companies? Software companies? Google has a lot of cash, why not take it? For the children perhaps.

Better them than me!

/Walk or bike, biatches!

Telos


But no one guy is going to say "I can leave my prices the same and gain more market share?"


It could happen. And does occassionally. But, they have margins to watch too. The shareholders dont want a 5% margin, they want a 10% margin. In a true commodity situation, margins decrease to the minimum point that investors are willing to accept as return on their capital. Considering you can find plenty of places to invest with greater than 10% return, they dont have a lot of room to play with. If there were more companies, there would be someone more likely to do it to grab share. But even then, the big boys would follow them down in price and prevent it. So, the small guys involved are willing to take the 10% too.

It is why margins are more important than total profit. If XOM was pulling a 40% margin there would be a good argument that their wasnt much competition causing price pressure. But, at 10%, they are pretty much following market price. As is their competition.

Vacaboi

I considered an ascii-art chart. It was hard to resist.

Tjos Weel: Telos


But no one guy is going to say "I can leave my prices the same and gain more market share?"


It could happen. And does occassionally. But, they have margins to watch too. The shareholders dont want a 5% margin, they want a 10% margin. In a true commodity situation, margins decrease to the minimum point that investors are willing to accept as return on their capital. Considering you can find plenty of places to invest with greater than 10% return, they dont have a lot of room to play with. If there were more companies, there would be someone more likely to do it to grab share. But even then, the big boys would follow them down in price and prevent it. So, the small guys involved are willing to take the 10% too.

It is why margins are more important than total profit. If XOM was pulling a 40% margin there would be a good argument that their wasnt much competition causing price pressure. But, at 10%, they are pretty much following market price. As is their competition.

So are we talking shareholder shortsightedness then? Gas prices go up because ultimately a shareholder can't understand a 5% margin on 51% of the market is better than 10% of the margin on 25% of the market? (To use completely fictional numbers, of course.)

rajuncajun1369: kindms: Why not simply create tax incentives to allow companies to offer more telecommuting ?

If less people had to drive to work everyday = less gasoline consumption. It also means less congestion on the roads and less wear on infrastructure.

This might not be a bad idea depending on what you are trying to accomplish. If you are trying to impact the price of gasoline you will fail. If you are trying to reduce congestion and wear on infrastructure, then I suspect it would work

I did not explain what I was referring to very well. I was speaking to the general idea of lowering our gasoline consumption. It seems that it would be fairly easy to implement an incentive for telecommuting which would reduce consumption as well as the other stuff I mentioned.

I agree it would do nothing to lower the price but it would address a lot of the talking points raised in this thread

Tjos Weel: Do you think a 0% tax rate for the oil companies would translate in to cheaper gas for us?

yes. Not favoring it (unless for all companies), but it would lower prices.

/The easy ones are easy.

They were given tax breaks already, and that didn't translate to "cheaper gas" for anyone. So why do you think that 0% taxes would translate to anything but record profits for the oil companies?

The only thing that will solve our oil dilemma is to invest in other power sources more heavily than we are investing in oil, once "our friends" in Saudi Arabia realize that we don't want their damn oil so bad, the prices will drop and we can be the masters of our own destinies again.

But we have to stop sucking that big oil cock first (looking at you SUV owners).

Tjos Weel:

Well done. It may be for naught, but there's going to be no rational comeback to the basic simple truth you've bene bashing Telos over the head with. Your mastery of the 'clue by four' is appreciated.

Telos

More realistic numbers are 10% margin on 25% of market or 5% margin on 30% of market. The other companies arent going to sit idly by and let it happen.

If they could grab an extra 25% of the market, they would do it. And get accused of predatory practices.

Telos: Tjos Weel: Do you think a 0% tax rate for the oil companies would translate in to cheaper gas for us?

yes. Not favoring it (unless for all companies), but it would lower prices.

/The easy ones are easy.


Please explain why companies would lower prices if we're willing to pay higher ones? More profit if we pay higher prices, isn't there?

Yeah, the phone companies and similar businesses don't lower prices when a tax is dropped. They convert it to a "surcharge" or pad it in as inflation, etc. Basically every time a tax is dropped (directly to the consumer or indirectly, doesn't matter), it's considered instant profit and the CEO gets to keep his job for another year. If people are willing to pay 39.99$ + tax and fees for phone service, why would they lower the price when it's not driven down by the market?

Don't forget that if an oil company made 10 billion $ in profit in 2007, if they make anything less than 12 billion (just a guess) in profit the next year, the CEO is pretty much going to be showed the door (with consolation prizes of course). They need to maintain or improve that 10% margin or it's considered a failure.

I don't like any of this, but for lack of a better system at least I am free to eventually stop pissing money away and invest in these companies to take advantage of the profits. People piss and moan about corporate profits, but then piss and moan when the balance of their 401K goes down as well.

/not sure if any of this made sense.
//libtard card holder.

soupgoblin

They were given tax breaks already, and that didn't translate to "cheaper gas" for anyone.

What would the prices have been without them? The effect of taxes is noise in the effect of barrel price. Will be if the tax breaks go away. As I said above, Im not opposed to removing subsidies, I favor it, in fact. Im just honest about what the result will be. However, as a whole, America would be better off financially if we removed ALL subsidies at once. There might be some chaos as some industries adjust (Hail Eris!), but I dont necessarily see that as a bad thing.

The only thing that will solve our oil dilemma is to invest in other power sources more heavily than we are investing in oil

I agree with this and highly recommend you do it.

incrdbil

Your mastery of the 'clue by four' is appreciated.

Thanks, this thread set me off for some reason. I cuss in a lot of threads when I get annoyed, but this one caused me to blaspheme, if "Jumpin Jesus on a Pogo Stick" counts as blashemy.

If Telos comes away with some basic knowledge of econ then it will be worth it. I really would like a nice Coase v Pigou thread but fark isnt the place for it.

Drunk Astronaut
labman: FlashHarry: however shall they survive!!!

Simple... They'll charge us more per gallon to make sure they make 40 Billion dollars this year, too.

Exactly. Corporations don't pay taxes, their customers do. They just pass taxes on as they do other costs.

Petroleum products (gas, heating oil, diesel fuel, etc) are a fairly classic example of inelastic pricing. People will still drive their cars without regard to the price.

Of course, inelastic implies a breaking point, and that point for gas is where alternative energy sources become cheaper than standard gasoline. We're supposedly getting close to that point now.

As a college student with next to no income, I reached my breaking point long before the current $3.39. Free bus pass is just about the only thing that lets me EAT. But the cost of food is getting ridiculously high now too because of the greedy corporate douchebags.

cchris_39: The liberals are useful idiots for the oil companies.

1. To beat the dead horse one more time - businesses don't pay taxes, they collect taxes. Now that they actually have an excuse to raise prices (blame it on the tax hike), you can bet they will raises prices by ALOT more than is needed to offest the $18B.

2. The greenies oppose every attempt to drill or build new refineries, restricting supply and keeping prices high.

If they were serious, and had any balls at all, they would threaten to bust up the big oil companies and create competition. There is no way a commodity should have these kinds of profit margings.

I partially agree with your statements. In most industries a profit margin of ~10.8% will get all of management fired! In my industry, the analysts crucify us when our margin drops below 30%. Microsoft's post-tax margin is 29.9% - why doesn't everybody want to "take" their profits?

Tjos Weel: soupgoblin

They were given tax breaks already, and that didn't translate to "cheaper gas" for anyone.

What would the prices have been without them? The effect of taxes is noise in the effect of barrel price. Will be if the tax breaks go away. As I said above, Im not opposed to removing subsidies, I favor it, in fact. Im just honest about what the result will be. However, as a whole, America would be better off financially if we removed ALL subsidies at once. There might be some chaos as some industries adjust (Hail Eris!), but I dont necessarily see that as a bad thing.

The only thing that will solve our oil dilemma is to invest in other power sources more heavily than we are investing in oil

I agree with this and highly recommend you do it.

incrdbil

Your mastery of the 'clue by four' is appreciated.

Thanks, this thread set me off for some reason. I cuss in a lot of threads when I get annoyed, but this one caused me to blaspheme, if "Jumpin Jesus on a Pogo Stick" counts as blashemy.

If Telos comes away with some basic knowledge of econ then it will be worth it. I really would like a nice Coase v Pigou thread but fark isnt the place for it.

You may notice things when smoother when you started explaining things rather than expecting us all to understand econ jargon and pointing at Wikipedia. You may have taken econ 101, but I took written argument 101... where we learned to present our points, not say something and expect the opponent to look up information to prove it for us.

Nemo's Brother: Expect $10 gallons when Obama takes over, assuming the Dems remain control of the Houses.

Dude....

Gas prices have risen 200% under Chimpy McFlightsuit's reign of terror. No one could possibly beat his record on incompetence and utter stupidity.

Please explain what part of your ass you pulled your statement from?

The Republicans have a proven track record of corruption and treasonous behavior when in power. The Democrats are not much better, but they haven't proven that to the entire American population (and the world) quite like the Republicans have in the last 8 years.

Telos

Know thy audience. I expect people able to post on the internet to have basic levels of knowledge in all fields. Hell, Im not an economist, but despite taking econ 1001 and 1002 19? years ago I have kept reading in the field. Like I said, I didnt expect high level knowledge but I expected basic concepts of how supply/demand curves work.

I still dont think it is too much that if someone uses a basic term to google it instead of arguing against it because you dont know the "jargon". Maybe its because I came here via the "business" tab and not the "not news" tab, I expected this to be like a typical "business" tab thread.

rajuncajun1369:

fight club: The problem with philosophical arguements is they are not pratical when dealing with the realities of the world. While I agree with you on a philosophical level, it is a pointless arguement. It is only valid if the realities of national security and the economy are unimportant. Kind of like trying to explain 'the allegory of the cave' to someone while they are stealing your shiat. While you may be right on a philosophical level that its only your perception that they are taking your shiat, the reality is that they just took your shiat.

bullshiat. This is a discussion about economics. I tend to think that most economists with PHD's know what the Fark they are talking about. Do you argue with your medical doctor before he operates? Why would you argue with an economist with a PHD? Most of these economists and noble laureates from Friedman to Becker can agree on basics. If you can't see the difference between philosophy and economics, maybe you should ask for help.

Are you trying to argue that oil is not absolutely vital to our national security and our economy? Are you trying to argue that the only thing that we need is food and water. Show me where one single economist argues that point, just one. Oil is a luxury only if you think anything above the level of a caveman is a luxury. The FACT and reality of our modern society is that oil is currently a neccessity in order for us to maintain our national security and our economy. To argue anything else is just naive.

While I agree that this can change, but currently, oil is a neccessity. And by neccessity I mean neccessary to prevent a complete and total breakdown of civilization as we know it.

Let me know when you come up with those phd's that say oil isn't neccessary for our national security and our economy.

Tjos Weel: Telos

More realistic numbers are 10% margin on 25% of market or 5% margin on 30% of market. The other companies arent going to sit idly by and let it happen.

If they could grab an extra 25% of the market, they would do it. And get accused of predatory practices.

Ok, I think I get what you're saying. However I still think the reactionary cry that the tax will just get passed on is bunk. Some portion of it, probably... maybe even definately. Not all of it, and so many things affect and fluctuate the price anyway that it might only mean hitting $4/gallon this July rather than this August. In any case at some point we'll actually stop being idiots and start driving less, at which point prices will come down again regardless of the tax right?

Telos

If the demand curve shifts, prices will drop. That doesnt mean just stop driving at higher prices, in means drive less at all prices than we do now.

Then again, if the supply curve shifts due to market forces faster than the demand curve shifts (and as 3rd world areas start getting more cars, I dont see the demand curve shifting downward at all) then maybe not.

We need an energy source other that oil. And guess what, at higher oil prices, the incentive to replace it gets higher. With oil at $20 a barrel, its hard to get the price low enough. But at $100 per barrel, or even higher, it gets easier and easier.

Now that will cause oil prices to fall.

FlashHarry: yes, their margin is just shy of 11%. funny thing about percentages, though - the numbers they represent get larger as the numbers they're taken from get larger. so, a ten percent margin on an income of several hundred billion dollars is a lot larger than a ten percent margin on an income of several million dollars. see how that works?

So, according to your arbitrary totalitarian impulses, how much would you graciously allow someone to profit after doing almost half a TRILLION dollars of legitimate business with customers who willingly enter into said business?

/ What's with this bullshiat, childish urge to tell everyone else what the fark to do and what they can and can't have? fark you.

Telos

not say something and expect the opponent to look up information to prove it for us.

Just one my point on this, I wasnt asking you to prove anything for me, I was asking you to expand your vocabulary. If you are going to argue econ, it helps to know the basic jargon. Knowing the jargon doesnt prove or disprove the point, it just saves lots of typing.

kindms: I agree it would do nothing to lower the price but it would address a lot of the talking points raised in this thread

I agree,it would address many of the points. The most effective way though, would be some sort of externality tax. I have never really heard of anyone speaking of this though. (would be too effective I think)

The oil companies made record profits this past year. Taxes may raise the prices some, but whatever. They pretty much name the price of gas, and it'll go up no matter what.

smitty1276:
/ What's with this bullshiat, childish urge to tell everyone else what the fark to do and what they can and can't have? fark you.

the half a trillion in sales came about how? do you think the might of the American economy, people, might ect had anything to do with it?

guess what? we demand our pound of flesh!!!

I Fark: simply put we need to make gasoline a utility. Price caps, regulation or government run.

This is the stupidest thing I have heard in quite a while. My guess is, you're too young to remember Nixon had the same bright idea, too.

Bastinado: I Fark: simply put we need to make gasoline a utility. Price caps, regulation or government run.

This is the stupidest thing I have heard in quite a while. My guess is, you're too young to remember Nixon had the same bright idea, too.

well he was a dumb republican so wateva

The oil companies are still making only about 10 cents per gallon, vs over 55-55 cents in taxes, so the government is already making over 5x the "windfall" profits of the oil companies, and now it's going to rip them (or rather us, by extension) off even more? What about the trillions of dollars oil companies invested in order to make these current profits?

All this will do is provide another inventive way for the government to make billions of dollars at our expense. I guess liberals figured we weren't paying enough for gasoline. You do know that most other business sectors show significantly higher profit margins than oil, and at much less risk? None of those are being singled out for destruction.

Freaking idiots.

j0ndas: The oil companies are still making only about 10 cents per gallon, vs over 55-55 cents in taxes, so the government is already making over 5x the "windfall" profits of the oil companies, and now it's going to rip them (or rather us, by extension) off even more? What about the trillions of dollars oil companies invested in order to make these current profits?

All this will do is provide another inventive way for the government to make billions of dollars at our expense. I guess liberals figured we weren't paying enough for gasoline. You do know that most other business sectors show significantly higher profit margins than oil, and at much less risk? None of those are being singled out for destruction.

Freaking idiots.

You are right. The poor oil companies. I think since it is such a burden they should just let the US handle its own oil. Afterall the margisn are soo small and there is no money in it. I know, I know I troll but its fun.

HeavyMetal The tax breaks were initially given to oil companies years ago when oil was cheap and they claimed they couldn't afford to explore for more. Now that oil is at a record price those taxes have outlived their purpose and are not needed since the conditions which provided the neccessity for them are gone. If the oil company can't absorb a 1.5% drop in pure profits when they are making billions, then capitalism needs to work its course and let the market correct itself.

First and foremost, if you raise the cost of doing business, legislatively, by 1.5% across the board, either the supply curve will retract some percentage to match the increased cost, thus driving the price up, OR the supply curve will stay the same but the price level will simply be raised across the board. In effect, what this has done is make it so that the poorest 1.5% of Americans will not be able to afford the amount of gas (numbers are made up, of course.) No business is going to take a 1.5% cut in profits when the change is -across the board-. That's what matters here.

Capitalism only works correctly when changes in supply cost are brought about by internal accomplishments like increased economies of scale or a distinct competitive advantage. Changing the corporate tax rate doesn't effect either. When Exxon determines how much to charge for gas day-to-day, they take their production costs into account and, as the *very last thing*, tack on additional charges to pay taxes.

Capitalism is working it's course, as alway. As an example, take the Prius. The Prius is a wonderful marketing scam; when all the numbers are done, it essentially lets you finance the cost of your future gas as part of car loan. (Pay the "Hybrid Premium" in order to save gas in the long run...it's almost a wash). Alternative energy research is at an all-time high and producing the best results ever. The problem is, of course, that basically all alternative energy sources available at this time are scams or trade horrendous localized environmental damage (see "Prius") for ridiculously mild and overblown global environmental paranoia.

The media is fear-mongering because Exxon, in dollars, made a tremendous profit. Part of running a large business in America is the realization that in any given election, your corporation could find itself semi- nationalized if enough people are pissed off at you.

If the market determines the price of gas and the market says based on supply and demand, according the the conservative economice experts on here it would be impossible for this to increase gas prices. Why? Well the companies might raise the price but since the consumer is only willing to pay around $3 a gallon (because that is the price the market has set), the consumer will use less causeing supplies to go up which should make the prices go back down to $3 a gallon (or less).

This will actually decrease our use of gas as well as increase supply and lower the price, unless there is some sort of price collusion. That is of course if the conservative economice experts on here are right, like they say they always are. Or do these economics only work when it benefits the rich?

First, your assumption that the consumer is only "willing" to pay $3 a gallon is flawed. Competition is what has kept the price of gas as low as it is. Not only in America, but overseas. OPEC versus non-OPEC countries. Large oil companies all face roughly the same product creation cost per barrel. If you look at this:

http://www.energy.ca.gov/gasoline/margins/

You'll notice that, by far, the largest cost comes from the raw crude. At $100 per barrel (42 gallons), that's about $2.20 a barrel from the OPEC nations. The second thing that you'll notice is that the second largest cost is federal and state taxes (25 + 18 + 18 = $.63). Add other costs and the distributor has roughly around $.48 profit on a $3.30 product. It's not bad profit, but it's certainly not the ludicrous profit you seem to believe Exxon is making.

You also have to look at the reduced value of the dollar. Nobody has corrected Exxon's profit to, say, 1990 dollar levels. As the dollar drops in value, it takes more dollars to competitively buy oil from OPEC nations versus, say, the Yen or the Euro. Exxon still gets paid in dollars, so they tack on their standard markup, about 15-20% (or 14%, according to the chart, when it's all done). Of course, the decreasing dollar is fantastic for our *exporters*, but it artificially skews the cost of importers. And Exxon is clearly one of the largest *importers* in America.

If Exxon were a retail chain (Circuit City, Staples, anything else) and only did 15% markup, the stock holders would be yelling for their heads. 15% is very, very low. The markets *are* working.

ConstitutionGuy: cchris_39: The liberals are useful idiots for the oil companies.

1. To beat the dead horse one more time - businesses don't pay taxes, they collect taxes. Now that they actually have an excuse to raise prices (blame it on the tax hike), you can bet they will raises prices by ALOT more than is needed to offest the $18B.

2. The greenies oppose every attempt to drill or build new refineries, restricting supply and keeping prices high.

If they were serious, and had any balls at all, they would threaten to bust up the big oil companies and create competition. There is no way a commodity should have these kinds of profit margings.

-------------------------------------------
I partially agree with your statements. In most industries a profit margin of ~10.8% will get all of management fired! In my industry, the analysts crucify us when our margin drops below 30%. Microsoft's post-tax margin is 29.9% - why doesn't everybody want to "take" their profits?

-------------------------------------------
Because we're not subsidizing Microsoft. We ARE subsidizing oil companies right now and some of us would like that to stop because they seem to being doing fine on their own. No one is raising taxes or taking any ones profits, we're just going to stop giving money to a handful of companies that don't need it. If they raise the prices (which is likely), it will simply prove that they are more in control of the gas prices then they would like us to believe.


To all you witless apologists out there, it's welfare for the oil companies the same as it is for poor people. For some reason, many of you would rather give money to corporations who already have plenty then to people who need help just to get by. I just don't understand people sometimes...

/If this means I'm a liberal, then so be it.

psyon: fight club: psyon:
Sorry guys, Gas is a luxury.

Moron. What do you think would happen to this country if we didn't have gas? You must think the same thing as what would happen if we lost Starbucks since they are both luxuries and all.

Well, I would imagine everyone would find other ways of getting around, like we did BEFORE we had cars. It could also inspire people to research other technologies and find a new way to power a car. Maybe we will get teleporters!

If the price of gas affects your budget so much that you have to biatch and complain about it, you need to adjust your budget. Move to a cheaper house or apartment, sell off your vehicle that is costing you $300 a month, make sure the new car is a sub compact that gets excellent gas mileage. If you have done all that, and you still are worried, find a better job.

That was the point of my earlier rant. The government is using OUR tax money to subsidize the oil companies' profit. If they are going to allocate OUR tax money it should be for the benefit of all of US not just the shareholders of ExxonMobil et. al.

Jodeo: FlashHarry: poor, poor exxon only made 40 BILLION DOLLARS last year!

OK. Where did that money go?
Well, about 50% went to IRAs, mutual funds, college funds, etc. It went to investors.

Next, it went to the people the earned it.

Third, it went into Exxon/Mobil's own research into alternative energy.

NOW: Answer me this: For penny of profit Exxon earns on a 15 gallon fill-up, HOW MANY PENNIES IN TAXES does the US Government already earn today?

I'd rather let Exxon make money to pay their investors, people, and research ways to profit in alternative energy than see it WASTED by our wasteful government.

Sorry FAIL. Salaries of ExxonMobil's employees, including the hundreds of millions they paid the fat farker pictured above, are deducted before profits are calculated and distributed to the shareholders.The point you keep missing is that the subsidies paid to ExxonMobil from our tax dollars are p[ure profit to the company. It is worse than welfare because the companies are already wealthy. It would be like sending a check to Bill Gates. He doesn't need it. He'll be fine. So will Exxon.

yhetti: HeavyMetal The tax breaks were initially given to oil companies years ago when oil was cheap and they claimed they couldn't afford to explore for more. Now that oil is at a record price those taxes have outlived their purpose and are not needed since the conditions which provided the neccessity for them are gone. If the oil company can't absorb a 1.5% drop in pure profits when they are making billions, then capitalism needs to work its course and let the market correct itself.

First and foremost, if you raise the cost of doing business, legislatively, by 1.5% across the board, either the supply curve will retract some percentage to match the increased cost, thus driving the price up, OR the supply curve will stay the same but the price level will simply be raised across the board. In effect, what this has done is make it so that the poorest 1.5% of Americans will not be able to afford the amount of gas (numbers are made up, of course.) No business is going to take a 1.5% cut in profits when the change is -across the board-. That's what matters here.

Capitalism only works correctly when changes in supply cost are brought about by internal accomplishments like increased economies of scale or a distinct competitive advantage. Changing the corporate tax rate doesn't effect either. When Exxon determines how much to charge for gas day-to-day, they take their production costs into account and, as the *very last thing*, tack on additional charges to pay taxes.

Capitalism is working it's course, as alway. As an example, take the Prius. The Prius is a wonderful marketing scam; when all the numbers are done, it essentially lets you finance the cost of your future gas as part of car loan. (Pay the "Hybrid Premium" in order to save gas in the long run...it's almost a wash). Alternative energy research is at an all-time high and producing the best results ever. The problem is, of course, that basically all alternative energy sources available at this time are scams or trade horrendous localized environmental damage (see "Prius") for ridiculously mild and overblown global environmental paranoia.

The media is fear-mongering because Exxon, in dollars, made a tremendous profit. Part of running a large business in America is the realization that in any given election, your corporation could find itself semi- nationalized if enough people are pissed off at you.

If the market determines the price of gas and the market says based on supply and demand, according the the conservative economice experts on here it would be impossible for this to increase gas prices. Why? Well the companies might raise the price but since the consumer is only willing to pay around $3 a gallon (because that is the price the market has set), the consumer will use less causeing supplies to go up which should make the prices go back down to $3 a gallon (or less).

This will actually decrease our use of gas as well as increase supply and lower the price, unless there is some sort of price collusion. That is of course if the conservative economice experts on here are right, like they say they always are. Or do these economics only work when it benefits the rich?

First, your assumption that the consumer is only "willing" to pay $3 a gallon is flawed. Competition is what has kept the price of gas as low as it is. Not only in America, but overseas. OPEC versus non-OPEC countries. Large oil companies all face roughly the same product creation cost per barrel. If you look at this:

http://www.energy.ca.gov/gasoline/margins/

You'll notice that, by far, the largest cost comes from the raw crude. At $100 per barrel (42 gallons), that's about $2.20 a barrel from the OPEC nations. The second thing that you'll notice is that the second largest cost is federal and state taxes (25 + 18 + 18 = $.63). Add other costs and the distributor has roughly around $.48 profit on a $3.30 product. It's not bad profit, but it's certainly not the ludicrous profit you seem to believe Exxon is making.

You also have to look at the reduced value of the dollar. Nobody has ...
Witness the apologist at work. Everything they say may be mostly accurate, but it's just one big excuse to maintain the status quo.

No, this is not an additional tax, it's a rescinding of a subsidy to a company that does not need it. If you think the government should continue to give the oil companies our money so we don't have to spend more of our money at the pump, then I think your an idiot.

Now, if you want to complain that the money saved from rescinding the subsidy should be returned to us in a tax break, that's another argument entirely. I'm not 100% on where I stand on that. I think we should get some back, but I also beleive in spending more on researching and buliding alternative energy sources.