Day by Day

Monday, May 12, 2008

On taxing "Big Oil"

Sure, sure, sure, let's all give the damn gummint some extra money by raising taxes on oil corporations. Sounds all great and nifty, right? Hillary Clinton says it has to be done!

Just who the hell do these people thing end up paying those taxes, anyways?

Oil companies, just like any other companies, have an obligation to one group, and one group only: Their shareholders. And that obligation is to make a profit. Period. Everything that a business does, from research to employing people to producing a product is simply actions directed at meeting that one obligation.

So, the gummint comes up and says "Even though we make more money off a gallon of gas than you do, you're STILL making too much money, so we're gonna tax you more!" And the gummint promptly slaps Oil Company X with a billion dollar tax bill. Well, the company has to pay it, because otherwise they'll be out of business and unable to fulfill their obligation, right? But now the company is in a hole. They're out a billion dollars. They can't grow money on a tree. They can't get the magic money fairies to give them more. So how can they raise a billion dollars?

By selling their product at a higher price, that's how. Which means that a gallon of gas, currently at $3.50, will now sell for $4.00.

If the Federal Government really wanted to drop the price of gas, it would eliminate the many taxes that have been added on to it. Federal. State. Local. When I lived in Seattle, and gas was around $1.50 a gallon, the state of Washington got $0.38 out of every dollar of gasoline sold.

That's a 38% tax rate, folks. The oil companies might make anywhere from 8% to 20% profit, depending on conditions and supply, but the Federal Government was taking 38% of every dollar!

But according to people like Hillary Clinton, that's too much. Riiiiiiiiiiiiiiiiiiiiiight. Ignorant bint.

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