Originally posted by crockett
If they raise there prices.. to compensate.. guess what they earn more then the "pay more taxes". It's kinda like a dog chasing it's tail. It don't get anywhere. They can't pass the taxes on "earnings" onto the consumer it comes out of "their" profits.
Btw I find it's extremely funny that all the right wingers across the internet are using this to claim the democrats are going to raise the price of fuel.
In 2000 the average price of fuel was $1.54
In 2008 I don't think there is a average yet but gas around here is over $3/gal.
George Bush has been president in that time and the price of gas has doubled.
but somehow it's all the Democrats fault..
That's the DUMBEST crock of crap yet. If you increase the amount you tax me on my profit, I increase my prices to compensate. It's that simple. I expect, and require, a certain amount of profit in order to have a decent standard of living. Every time the federal, state, or local government has increased my taxes, I have been forced to increase my prices. I have the same bills to pay in my personal life as anyone does.
For most of my adult life, I have either owned my own business, or at least participated in the running of a business, except about 5 years, and even then I had a part time business. In EVERY case, taxes were a business expense, and when any business expense increased, the cost of the product or service increased. PERIOD. Not just my own business, but EVERY business.
The oil industry is just like any other business, especially one that size. You have stock holders. Those stock holders expect a certain return on their investment, and honestly, 9% is not a great return. Drop below that, and stock holders become unhappy. Then they sell. When they sell in numbers, the price drops. Ignorant people look at GROSS profits for an entire industry and "decide" that "those companies make too much money", regardless of the profit margin or the size of the business. Well, 9% of a world wide commodity industry is GOING TO BE A HUGE NUMBER. Hell, ONE PERCENT would be huge. In the eyes of fools, the oil industry income will ALWAYS be obscene, because the fools have no grasp on economics.
Let's explore this theory on taxing and price controls. What happened when we had price controls on gasoline? We didn't have enough! I sat in line to buy gas to go to school and work. I went to the Co-Op to buy diesel for my tractor and they didn't HAVE any. What happened when a bunch of clowns came up with this brilliant idea called the "luxury tax"? They taxed yachts and expensive cars. So the wealthy just bought or traded used yachts and high priced cars. Who suffered? The people working to MAKE those items. The wealthy didn't suffer, they still HAD their "luxury items". But the poor working people who WERE making those items when the wealthy bought new things BEFORE the tax suddenly either didn't have a job at all or barely had a job, at reduced pay and hours. Oh, and revenue DROPPED. What happened when Nixon tried price controls? Rampant inflation occurred anyway, and so did the recession.
People go into business to MAKE MONEY. They take risks, they go through extra hassles, endure more stress, and put in more hours. PROFIT is what compensates their efforts. If you don't make more money, why go through the hassles?
If you think you're going to tax ANY business that sells a product or service to the public and they ARE NOT going to pass the cost of that tax on to the end consumer, you don't understand business or basic economics. You do not stay in business if you keep absorbing costs.
