How a Windfall Oil Profits Tax Would Hurt You

Are people dying because of high grain prices caused by oil speculation? YES. There is a moral obligation to take the profit out with a higher tax on oil companies and speculation. Within 24 hours of annoucement, the price of oil would go down dramatically. If oil companies need money for exploration, the government can give them a rebate with accountability.

Your article has not touched the issue, the crazy rise in the price of oil is caused by speculators such as Goldman Sakes and a loophole in the law created in 2000 by Wendy Gramm and supported by her husband which took away regulation that had served our country well this loop hole was pushed by Enron and even though Enron was prooved to be criminals as a company that law was never taken off the books. Wendy Gramm after she created that loophole moved to be on the board of Enron but because of her husbands power she didn't go to jail with the rest of the rats. We should not give tax breaks to the oil company they don't need aid to keep their business viable. We should not have windall tax on their profits if don't allow them to create more refineries and drill in the US for oil and natural gas. But Exxon has made the decission not to build more refineries because they can make more money selling oil in Asia, which they are doing with oil from tha Alaskan pipeline. All that I have quoted is supported with facts if you are going to write an article please support facts not articles your network doesn't support. We need truth not special interests.

How about this for an article: "How adherence to an energy resource for transportation will harm our children's health" Hey, you know ? we're JUST over 100 years of petro use. I think it's fair game to start asking what are the long term health benefits of breathing in petro exhaust. Platinum won't fix it. Oddly NASA just commented on June 11th specifically about two resources on the moon, platinum and helium 3. If the oil companies had their way, they'd go all the way to the moon, to get platinum to further catalytic converter production all the while skipping the answer that IS going to replace petro. Hey, if you had something pouring out of the ground that made you money ? let's create a new term, a 'money hole' would you abandon it if you found it it wasn't in the best interests of your grandchildrens health ? Or would you say - hey, I can really show up my neighbors for my lack of self esteem with a big car - a big home - big diamonds on the rings - and a big suit ? carrying out the western paradigm of self worth achieved through materialistic consumerism ? It's not hard to figure out people. If US corporate interests (the ones that haven't moved to Dubai yet, as Cheney's Halliburton did move there) say 'oil is profitable, and profits are all that matter ?' Hey, when OTHER nations such as Saudi Arabia and United Arab Emirates OUTPRODUCE you in oil exports ? and start to even cut into your customers ? Hey, you asked for it. When Saudi Arabia and UAE starts to take 1/6 or your base majority citizen's INCOME earned through LABOR ? to pay for a dead end petro based transportation energy model ? You asked for it. As I've said, not that anyone can stand being in the same room with Sean (Penn) when he's smokin' like a chimney, but he does have a valid point, we deserve the government we get. If you're content with oil/petro lobbyists keeping YOU dependent on oil - only to have an oilman alleged president tell YOU that 'the problem is, yer' addicted to oil (AFTER he helps make SURE of that ? ) hey, suck it up America - You were complacent to allow US oil corporations take their redneck cheap 10 million a day profits all the while leaving giants like Saudi Arabia and UAE to move up to 1 BILLION a day - and you know what ? we're reaching a crossroads now - the crossroads US oil corporations were in denial about. the crossroads where hard working US citizen's money goes to pay for a SKI RESORT making SNOW FLAKES in the DESERT! Good going - if you think voting in 2008 will change behind the scenes oil lobbying, think again, it's ignorance and suffering until the grown ups with the shiny black shoes show up on this island of Lord of the Flies. I'm going to stay on the beach and wait- and avoid the unnecessary wars over the conch - being the corporate media - I think a fine view of the stars tonight will be cathartic for me, likely for all my ancestors, and likely for all those to come forward. For the smarter people in this world, we KNOW that fusion derived from the very canvas you stare at in the nighttime sky delivers all the energy we need. Let's see - hmm - dig a hole in the ground - watch petro come up - "Lookey Leroy, it burns REEEEAL GOOD" OR explore through higher education advanced physics to promote a completely CLEAN energy solution through helium 3 using electrostatic over electromagnetic hmm... Gee, I doubt Bush could even SPELL Electrostatic or tell the difference between MIT's plasma lab's use of EM over Univ. of Wisconsin's use of ES to deliver a WORKING H3 reactor. Ignorance begets suffering.

Upon waking today- I had an image of that latest Qatar Airline advertisement on TV, the one with the 5 star food services ? (Tickets MUST be $2500 and up). Then I thought about US Air stock at $2 a share. Then it hit me - (and this article title is askew). First, this article is somewhat misleading. The REAL title should be - How Oil hurts you. Sure - Qatar is more about liquid natural gas than oil, BUT - doing some simple math here ? Saudi Arabia - let's call it's output of 9.x million barrels a day to 10 for easy math. and Let's shave oil down to $100 a barrel. That's 10 million x 100 = 1 Billion USD a day - for what ? some initial well investments and some oil workers to keep it going and trucks or pipeline costs- woo ho- beans. That's an EASY 900 Million + a day for total profit. Now, keep in mind that Qatar again has a five star food service airline being advertised where US Air charges $2 for a bottle of water (probably IF they even decide to carry the water, as it weighs 8 lbs a gallon). Check this out. This is what occurred to me upon waking today, and it's crystal clear to me, and yet ? I've never considered it, nor have I read about it. The REASON Saudi Arabia is becoming the world's new financial center, and the reason Dubai skyline is surprassing New York Cities in the up coming years, and the REASON Dubai can afford an indoor ski resort in the desert, is the money from oil. Now, why do these countries that - say King Saud commented on regarding how his people just 60 years ago were living in TENTS -rather HAPPY, without this bloodshed ? Why do these countries GET this near 1 Billion a day from US consumers POCKETS from their hard earned / labored HOURS to work for that money to buy gas with ? Simple: It's the people like the Bush family, the local US oil companies that have lobbied - over and over to keep us, that's right, KEEP US addicted to oil. Every alternative energy solution for non petro-based cars ? Why ? Puzzling, they just dissapear. Some people argue - well the markets determine what wins and loses at the end of the day. Perhaps with oil futures so out of whack, this will almost GUARANTEE oil stays the #1 resource for transportation. So the distilled thought here is that while US oil companies protected their greedy little redneck rigged money for nothing operations (US oil ventures), only thinking about THEIR profits, hey hey hey, Saudi Arabia played the same game, and at this point ? has ENOUGH money- well gee, I just read Abu Dhabi has some 2.x trillion (that X is what I forgot, but you know it's the hundreds of billions place value holder there) to invest in the US. Abu Dhabi could buy 1/4 of the US homes in one chunk - and that's at FACE value - not even foreclosure prices- IF they wanted. That's big folks. Where did they get that money ? and why ? Because - US oil companies were SO interested in their TINY profits in comparison to the folks pumping out 9 to 10 million barrels a day ? they didn't care, they ONLY cared about their OWN texas rigs or profits - because it was money for nothing. And now ? we all pay for this insolence. This guy acting as president is a BIG player in the oil sector. If you go back and review Bush's speeches, I have one I find peculiar. During ANWR, Bush got up and spoke about how since the 1960's ANWR has been scoped for drilling - and get this, out of the blue - he starts up talking about these very complicated aspects of 'slant drilling' and whatnot, I mean, he actually KNEW what he was talking about, and was VERY articulate about it, nothing like what we see normally. So, yes, he's an oil man and you can add 1 + 1 I think. Bottom line here folks, the US oil companies OWN interests in profits have ALLOWED Saudi Arabia, and United Arab Emirates to slowly suck up US citizen's money at the pumps. I think this is why we are in this dilemma where oil dependency now is costing the lower lower class potentially their potential to even GET to work at the moment, OR eat. There is no other way to look at it. While the US companies held content with their meager profits, they enabled Saudi Arabia, Chavez, Abu Dhabi to become so powerful ? They really can just come in and buy anything they want in the US, probably including the presidency to ASSURE the oil consumption patterns continue. Wouldn't you ? if you were criminally disconnected from the best interests of the children to be of the species as a whole ?

I agree with DrDetroit that it is nice to see another MacDonald article, but Doc your comment was nearly longer than the article itself. I know there is a lot to say on this subject, but whoa. Also concur with Ted Sherman that Elizabeth MacDonald should get herself onto the O'Reilly Factor. It shouldn't be hard to do as both work for Fox. If she could keep Bill from shouting her down it would be informative. Excellent article. I look forward to more of your viewpoint. Thank you.

The real blame for high oil prices belongs to congress for not allowing drilling in ANWAR, off the coasts of California, Florida, and New Jersey. Anyone who understands economics 101 knows that taxing the only companies in our economy who can provide more oil supply will only lead to lower supply and higher prices.

The oil boom is creating jobs that could be lost overseas if a windfall profit tax is enacted. ONE ANALYSIS I just read says that according to annual reports for the largest 25 energy companies in the S&P 500, 20 oil firms had more employees at the end of last year than they did at the end of 2006. Wow, care to be a respectable writer and actually name the source?

As Ronald Reagan said, "Corporations don't pay taxes; PEOPLE DO".

I wish NBC would invite you to Meet the Press on this issue. Though they wouldn't allow such logic in a million years (no disrespect meant to the late Tim Russert). Or, for that matter, Bill needs to have you on the Factor. Excellent editorial. I don't know how it could be more clearly explained. Thank you. Thank you for not blaming speculators for the whole "crisis". Many people want to outlaw speculation, and tax the hell out of oil companies because of what they call obscene profits. Speculation is a key player in price stability. Speculators buy when prices are low (driving them up) and sell high (leveling or driving them back down). And profits are... business. Oil companies are in business to make their shareholders money. It's the American way. I'm preaching to the choir.

Good informative article, and correct to most peoples way of thinking. Yep, the Hillary and Obama types will push this to the fullest, they may not know economics, but they do know how to buy votes. Sadly, enough people will buy their incorrect bull to sell their vote to them, and most will get back in. If people would stop and think,, Obama,, Hillary, has been in the senate for a few years. Isn't that where bills are introduced? where you can make a difference? In their years in office, they have done nothing, now they want us to believe they will if we make them president?

Thank God someone out there still have some sense. It's refreshing to read an article that explains what is happening, rather than speculating/guessing/hysterically reacting. But that's what you get when journalists are as poorly educated (read stupid) as the average American. They hit the desks with English degrees and then try to explain business to us. They don't have the background to understand this, and they aren't making any effort to educate themselves, either. That goes double for the politicians in the Beltway.

I'm afraid that the average taxpaying citizen has little ability to influence the thinking of congress. The press has the most opportunity for this influcence by writing informative articles such as yours. The majority (in my opinion)of our representatives are only interested in getting reelected and dance to the tune of those who supply them the money to run. The idea of bringing many knowledgeable people together to get the best deal for the american people is just not in their interests. I need to find and donate to a PAC that has the taxpayers interest at heart, our representatives really aren't doing the job! Thanks for your expertise and informative articles.

Strange that politicians keep going to the same whipping boy. Perhaps a windfall tax on George Soros, GOOGLE etc would be in order. Joe Sixpack does not realize that oil companies net is not out of line with other businesses. Because the companies are so large (they need to be to afford to takes expensive risks) it looks like big profits. Many small businesses make much better returns and no one would dream to punish them. Somewhere along the way, goverments lost their way (probably a left turn) and instead of doing governments job- protecting its citizens, making and enforcing laws , they decide that redistribution of wealth was their business.It amounts to publicly abusing people who work hard getting an education- take risks, work hard - and bestowing freebies on folks who did not apply themselves, took no risks, made no effort and bitched.Where is the Spirit of America- work hard and you can achieve. The country will soon be transformed from the home of the "Movers and Shakers" to the home for the Shirkers and Fakers"

Why bother taxing the oil companies who are just the middle-men. Let's tax the Saudis instead! They have deeper pockets anyway...

With our falling US dollar, GAS SURE MUST BE CHEAP USING THE EURO.

I forgot to distill the article and respond... The nation was birthed in part due to taxation without representation. So tea to oil, I suppose there exists a connection. Many people feel as disconnected to Washington D.C. politicians as I gather early residents felt distant from England on taxation policies. I agree on taxing corporations LESS in that - yes - it will end up likely costing a job or a limit in in spending, but wait a second here as I reason mid-sentence... Companies can seek credit though to gain access to any money, and the question is whether the company can be profitable within the margin of taxation ? Perhaps it's fairer to tax only the consumer and never the employer ? All in all money is given value through the same means words are. Shared meaning IS culture at the end of the day, language and money are both forms of culture. It's enough perhaps that people even agree that words mean anything - even in a bar room brawl ? yes, two parties are agreeing on something without even recognizing that, and even with currency, the same. So perhaps it's enough that people can even get together to believe that the currency is worth anything. Jacob Needleman points out money and the meaning of money is derived from a common shared faith and belief, nothing more. How fragile that is eh ? I suppose taxation rides on that faith. I mean, the Federal government is unable to act as a corporation and seek to generate profits or go bust right ? Is it right or just that the Federal Government should parasite off existing corporations and citizens for taxation purposes ? I've considered this at times - being that a successful administration should derive its own profits. I do know this, people play that powerball lotto and it amazes me how quickly 250 million can be amassed. If only big government worked like that. You know ? Education is up, everyone buy your tickets, and everyone would win as the money would be spent across the board. Perhaps I'm suggesting voluntary taxation flat out, citizen and corporate. Problems exist with nationalism. For Who should a nation state pay taxes to ? World Bank ? There is no centrality above the node of nation state, formally. Economically there does exist the IMF, and in the 1950's the ITO (International Trade Organization) was attempted, but failed. We HAD the World Trade Center - but Dubai has announced it wants to be the new 'world' trade center, I'm not sure how that will work out once petro is put in its place in respect to childrens health. A windfall tax on oil would hmmm let's see... Oil companies would be encouraged to go off shore (no pun intended) - literally. Oil companies would HAVE to pass that tax onto the consumer. I'm not sure the US federal government has any business taxing the oil companies unless it can be argued it's a health tax for the damage they are causing, but you'd have to prove the oil was used for burning with an open ended exhaust system, and THEN get the AMA in to back that statement about kids who live within 500 yards of a highway having 2x the rate of asthma - it'd be complicated. I just want to see petro gone in the shorter than longer term. In the meantime ? Taxation on petro companies will encourage them to move offshore. I don't get anyone who says - drill locally - the price is set globally. I watched the CEO's of all the big oil companies on C-span post Katrina, they made a good argument that the oil prices were not gauging, they were set by global demand. so local drilling just means local profits, period, oil won't budge whether it comes from the US or Saudi Arabia, on that Chuck Norris should go back to unrealistic movies where power and force are used to solve problems that might otherwise be solved through diplomacy. I'd hate to translate one of his movies to US middle eastern policy, oh wait, never mind, Bush already did. Kind of like O'reilly when he gets angry, he uses power and force, screaming, kind of an acoustic 'shock and awe'. Oh well - enough on power and force, O'reilly, Norris and Bush admin foreign policy. Should the US Fed gov use force to tax the oil companies ? They'll move. if Halliburton can relocate headquarters to Dubai, so can Exxon. The entire subject though is like Jesse Jackson's game show on Saturday Night Live decades ago - called 'Moot' when contestants would ask a question and he'd interfere and go 'I'm sorry, the answer is MOOT' and cu tthem off. Petro is a dead end solution. It doesn't burn clean. Natural Gas is probably the only clean energy solution we have until transition to helium 3. If helium 3 is such a crazy idea ? Why has halliburton been acquiring patents on h3 reactor technology since the late 90's ? Why did Hallburton announce it's entering the space craft sector 1 year before bush announced "We're goin' to the moon to better humanity" ? Odd - China, India, Russia and Japan all say they're going to the moon - China VERY soon - but odd indeed, they all say for one reason, the helium 3. Just yesterday I see NASA unveiled its new lunar surface exploration craft. Anyone catch that ? Funny, there is NASA yesterday - without permission from Cheney- stating 'oh yes, helium 3 is there'. approx 23 tons of h3 can power the entire US energy grid for one year. that's not bad when you consider the costs in consolidating that into liquid form and bringing it back, the reactor technology is here, and it's clean, VERY clean - cleaner than Larry Craig's fission revival attempts. So, in so many ways ? I really don't care whether petro is taxed or not, the great irresponsibility is in part on the consumer that we still burn it for transportation, let it fly out the exhaust pipe and care not, OR that Clamped / Desertley Hillbilly esque companies into oil drilling just say 'Well now, it comes out of the ground, why would we want to stop a 500 million a day operation ? ' More important than petro taxes in my view is a matter of conscience on use of petro at all to begin with. I like to call that fishing up stream. I'm fine that most people will respond saying DrDetroit - you're a loon, but helium 3 is a real shot at global energy and health related issues to global energy being resolved all at the same time as bringing an affordable energy solution to the table of humanity. I really want to keep my eye on that ball - nothing else in my view offers this potential. Geothermal is always my favorite solution locally - you're REALLY tapping gravity and the friction from the earth's orbit to the sun I suppose. Wind, same thing, you're pulling from gravity - only more so the rotational features of the planet's gravitational relationship to the sun. TECHNICALLY, Oil to is from the sun, then again, isn't everything ? When they go BOOM, of the 3 types of stars, one type is responsible for most matter in the period table. The Egyptians had it goin' on, worship the sun - hey, if you need some teleological commitment to god on a causal factor as to where suns come from - fine - they probably covered that too ! Don't forget now that the Bush admin finally came out two weeks ago in their 3 year late climate report stating 'oh yeah, that global warming thingy, yeah, that's real, sorry bout the delay - uh, mm hmm - yeah, petro contribute, yep' I wager that report was held off until the VERY last minute to exploit oil and oil futures. Odd no major media networks covered the Bush Admin's climate report and that it stated two fold - validated the term 'global warming' and also stated petro is in part at cause for rising temperatures. How bizarre. The REAL tax from Petro has nothing to do with money I suppose- that's my point.

If drivers in China can purchase gasoline for cents on the dollar due to subsidies as you state in your article, how come gasoline translated to roughly US$3.50 per gallon when I visited China in May 2008? Is what you claim factual or similar to the the words that fall from politicians mouths? Don't get me wrong as I agree with the majority of your piece. It really just strikes me as odd that the gasoline prices I saw in China in May 2008 seemed to mirror the prices seen at the pump in the US around the same time. Market forces?

Dear Elizabeth, I am a small business owner myself, and there's one thing about the oil companies record profits that puzzles me in the current environment : Crude oil is a raw material for oil companies that they need to purchase, and is a very important part of their cost-base. So, if the price of crude oil goes up, their costs increase, which means their profit margins should come down, no ? The only way that that hey can increase their profit is by increasing their selling price of the refined product more than the increase the crude oil. That's how it works for my business anyhow. Simple question : where do their record profits come from then ? Johannes Belgium

Outstanding! Wish more of our lawmakers and policy givers would take note at what the market is saying. If we really want to help, sign the drill here drill now petition. And, stop subsidies to the EU! W

Elizabeth, While I read your article I must thank you for being more informative than most. One thing that I feel is that the news media in general is talking regarding the oil story and no one, to my knowledge, has not answered the following in an in-depth manner. It may make a good series. What is the actual, complete oil production process…..from ground to gas tank, (please give me credit if you use this by-line, I just thought of it and kinda like it  )_ I am amazed that more people are not outraged at a 60 cent rise in the last month on a gallon of gas. Not to mention the overall price increases. I understand that China and other countries industrializing are a factor, as is the production amount, as is the hedge funds and futures people. If someone did a story on how a gallon of gas gets from the ground, through the process, into finished gas I put in my car, I think you might accomplish really and truly informing the American public. Thanks for your time

To say that the price of oil is not being jammed by the speculators is ubsurd. How can the price of oil double in one year. Reminds me of the dot com BS in 01. Looks to me like the working man is caught again. Rob

Of course very few in Congress are listening. As you point out, they are largely concerned with staying in power once they are in. They accomplish this with thousands of legislative "earmarks for pork barrel projects in their home districts that are funded without open debate or regard for fiscal responsibility. Recent attempts by Congress to limit pork, such as the ammendment to the Senate's 2009 budget act", which would have put a one year moratorium on earmarks, failed miserably. Earlier attempts T(the Pork Barrel Reduction Act and the Legislative Transparency and Accountability Act of 2006), had enough loopholes written in to be all but meaningless, and still failed to pass. John McCain has been a vocal critic of earmarks, and if he is elected president, it will be interesting to see if he can reign in the wild spending spree in Congress.

It is a shame that people like Shepard Smith or Bill O'Reilly doesn't ask you to comment on the high price of gas. Oh yes thats right he has a far more socialistic view of this. I would like to see you, Newt Gingrich, some like minded congresspersons (have to be politically correct), Eric Bolling, and Charles Payne to block out time on television say two hours and list all of the issues that go into the price of oil and list recommendations on how to fix it or how to control it. Love your articles keep up the good work. Do you need an assistant? (lol)

Thank you for the article. Very informative and to the point. I hope that an increasing number of people see the logic in the figures like in this article and recognize the failure that windfall profits would bring. In my opinion it is a political manipulation to appear to "be tough on Big Oil and big business protecting the American consumer" and exploit the economy to pursue socialism.

Most peculiar - perhaps unconscious in the article above is the use of WIND (fall)- :) On the flip side, I did learn the latin Fulminare from this article- 'to strike (as in lightning)' as I had to look up 'fulmination' - one thing for sure - the Ancient Greeks must have one heck of a winning thinking system such that our medical terminology can stem from it without much need for any new words- and the Romans with Latin as well - that our biology and law can inherit so well without need for changes. I wonder what elements from our culture might be worthy of holding water 2000 revolutions around the sun later ? Let's hope it's not nuclear weapons ! or fission - sheesh.