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Obama details plan to tax excess oil company profits

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The first to mention the need for speculative oil trading reform was Mr. McCain. obama was big on a windfall profits tax, now he is trying to poach another person's idea and call it his own.

obama's caught out in yet another lie.

RR

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I don't think that McCain was the first to mention the need for speculative oil trading reform. This idea has been around for a while. He might have been the first of the two candidates to "mention" it publicly, but that would require a rather exhaustive search of both candidates public comments on the energy matter wouldn't it? And even if it were true, shouldn't McCain be sourcing his idea instead of poaching it for his own?

Obama still seems to be rather big on a windfall profits tax. It isn't as though he has gotten off that horse and is now riding another. It's more like he's hitched both horses (windfall profits tax and curbs on speculation) to his buckboard.

I'm not sure what "lie" you are referring to so it's a little difficult to say anything sensible about that claim. However, as far as the American public is concerned, if an idea is a good ideas it doesn't really matter who had it first. What matters is who can sell it.

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he is trying to poach another person's idea and call it his own

Are we talking about high school term papers or a national crisis? Do you really think the best way to solve it is to make it into a contest of idea ownership? If McCain had sponsored legislation to close the loop-pole and it had passed and been signed into law there would be no need to revisit the issue and he could claim it as his success. But obviously he didn't. Moreover, taxation of windfall profits and speculative oil trading reform are aimed at two different players in the process.

And how would you characterize this?

Last week, McCain criticized Obama’s proposal for a windfall profits tax, saying it would limit oil exploration....Despite his criticism, on May 5, while campaigning in North Carolina, McCain said he was willing to consider the same proposal for taxing excessive oil company profits.

Flip-flop or straddle? I can imagine the abuse Obama would suffer on this site if he, rather than McCain, were the one who was all over the place on the issue.

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Can someone tell us how much George Bush is giving the big oil companies in tax breaks?

And exactly how much of the money from those tax breaks has been invested in bringing more oil online?

And, exactly, why are oil prices shattering records now?

Also, wasn't it Chevron that made the biggest corporate profit in history recently??

Hmmmm...something doesn't seem right here, but if I was a George Bush Yes Man, I'd just sit in front of my computer and keep repeating "the oil companies 'need' all those corprate tax breaks given to them on a plate by George Bush so they can invest it to find more oil for my SUV!"

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Oh, for cryin' out loud, as if this is going to result in an increase in the supply of oil or a decrease in the price of oil. It's not.

"Obama targeted the oil companies and traders after rejecting calls by both McCain and George W Bush to lift a ban on offshore oil drilling"

Is it actually possible this guy is going to be our next president? I can't stand it...

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Sarge, heh, yes it is possible and the way things are going, the majority of your countrymen and women will have voted Obama in as president.

Once again it looks like you will be left out in the cold and on the wrong side of history :-)

George Bush/John McCain just wants to use your taxes to dig up more oil so that the production process will pollute the air for you and your future kids.

Is that what you want?

Obama, on the other hand, wants to wean America off gas and put the country on track to use more environmentally friendly renewable energy sources.

Clean air with Obama or vs. dirt air with Bush/McCain - what's it going to be Sarge, what's it going to be? :-)

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"WASHINGTON — With American gasoline prices breaking records...." - because Bush and Big Oil have sat on their hands for the last 7 years, until now, in a logic shattering move - George Bush blames the Democrats for high oil prices.

ROFL!!!!!!!! Too funny :-) Why does anyone with a pulse buy this spin?

"Last week, McCain criticized Obama’s proposal for a windfall profits tax, saying it would limit oil exploration."

WHAT oil exploration? Oil companies already have vast expanses of land under their ownership that they are not exploring.

What's the point of opening up ANWAR or offshore California to drilling if the oil companies already own land they could drill on but haven't??

Why are some people just so gullible that they buy the Bush/McCain spin?

Has using your brain gone out of fashion?? :-)

It beggars belief!?

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OK, here's a little tidbit for the Obama Bashers -

"Last week, McCain criticized Obama’s proposal for a windfall profits tax, saying it would limit oil exploration. He likened it to a similar proposal signed into law by President Jimmy Carter during the energy crisis that helped cripple his presidency.

Despite his criticism, on May 5, while campaigning in North Carolina, McCain said he was willing to consider the same proposal for taxing excessive oil company profits."

When Sen. McCain isn't flip-flopping like a fish out of water, does he even know what day it is? :-)

Is Sen. McCain the BEST the Republicans can come up with????

When are they going to wheel out their real candidate? LOL!

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Instead of taxing windfall profits, why not cut the oil company's subsidies? The point of taxing windfall profits is to get more money. Instead of a 2 part system of giving them money and then taking it back, why not eliminate 1 step by simply eliminating the oil company's subsidies?

Taka

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What will a windfall tax do for the average American?

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Taka,

The subsidies come in the form of tax-write offs. This is how Arbusto managed to stay in business despite never hitting oil; the investors took advantage of the IRS tax-code provision which allowed them to deduct up to 75 percent of their losses.

In short, slashing subsidies would involve amending the tax code.

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SuperLib, what will increasingly dirty air and an increasingly polluted environment do for the average America??

Please think a little longer term than just next week. :-)

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But Sushi we both agree that drilling won't lower prices, so it won't affect the push to develop alternative fuels. Is there another motivation that you're not telling us about?

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Taka:

Instead of taxing windfall profits, why not cut the oil company's subsidies? The point of taxing windfall profits is to get more money.

Now there's an idea.

Will Obama propose to prop up oil industry profits if they dip too low, one wonders? Would President Obama similarly manage the profits of other industries within an acceptable ban?

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We could just invade Iraq and steal all their oil. You know Bush is just itching to.

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RedMeatKoolAid - You're real funny. he did that and the Iraqis haven't decided how to split the oil revenues, so they do nothing.

The real pathetic part is george bush attacked to steal the Iraqi oil reserves and he actually had contracts let to the major 5 US oil companies. Then Iraq stapped everything

All republicans say, don't you dare tax oil. Give the petroleum companies everything they want. Open up all areas they want, period. Don't tax them at all. Give them uneven breaks every chance you get.

The people can just kiss their butts. They don't care what happens to the price of oil. They would rather kiss the butts of the petroleum companies then see to it that we get the fair shake.

If John McCain gets in, he'll be giving more tax cuts if he can to the oil companies and spending years and years m ore in Iraq. Along with thosed permanent bases he intends for us to pay for in tax dollars.

Oh yeah, more tax cuts. < :-)

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I would like to see taxes collect from the tax on the windfall profits, fund a group of scientists to come up with the alternative energy source and put it into production, sponsored and overlooked by the government.. Socialism? Communism? If so then we need a little of that. There are too many companies ripping off the public these days and this goes especially for the oil companies! Something needs done... I am hoping it will finally be Obama that takes action and sets a new direction for this country , not only with this energy issue but with trade issues and every other circumstances that has developed that has pu t us on the loosing end as a consumer and as a country. One can not blame it all on Bush though, because we have been getting sold out for the last 20 -30 years, Bush has just had a hand in furthering the situation. Dem and Repubs are all the same, let us hope the character issue will come into play this time.

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Shima,

Will Obama propose to prop up oil industry profits if they dip too low, one wonders?

Well...I'm going to go out on a limb on this one and say I don't think we need to worry too much about the oil companies not making enough money.

As for me, no bailouts for any oil companies whose profits dip unless their CEO's take a pay cut to $100,000 a year. I'm not a big fan of corporate bail-outs when the CEO's are still making millions of dollars a year.

I guess my question regarding the oil subsidies (in the form of tax breaks. Thanks Betzee) is this: Why are companies that are recording record profits being given subsidies or tax breaks at all?

Are non-record breaking profits not enough? This one seems like a no-brainer to me.

Taka

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TonyUS,

I would like to see taxes collect from the tax on the windfall profits, fund a group of scientists to come up with the alternative energy source and put it into production, sponsored and overlooked by the government.

Then here is a story for you: http://www.timesonline.co.uk/tol/news/environment/article4133668.ece

Taka

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Here's an interesting, related story:

www.newsvine.com/_news/2007/12/06/1145337-china-plans-subsidies-for-oil-companies

While we go after our "evil" oil companies, China is supporting their oil companies.

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It's like a cartoon I saw featuring a donkey as judge in a hearing at which oil company execs are forced to endure the hysterical beast pounding its hooves and screaming, "Well, maybe we'll repeal this Law of Supply and Demand!"

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As for me, no bailouts for any oil companies whose profits dip unless their CEO's take a pay cut to $100,000 a year. I'm not a big fan of corporate bail-outs when the CEO's are still making millions of dollars a year.

The other day I was reading an article written by someone who served in the Reagan administration. He made the case that the Fed, which was recently forced to bail out the banking system, had increased the dollar supply which in turn contributed to weakening our currency (making oil more expensive). Now some of the top dogs at Bears and Stearns will face criminal prosecution as did the Enron head honchos. (No doubt the defense will be the same: "It's not my fault!")

Oil companies did less well in the 1980s when the price of gas dropped. But I think their subsidies, in the form of tax breaks, mean it's unlikely they will lose money. The big ones anyway, not those in the Arbusto league which was essentially a tax write off vehicle for wealthy investors.

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I think it's time to have a peek at Cheney's secret energy plan. Before we make a new plan we should see how well we performed against the old one.

And wouldn't it be strange if things were actually now going according to plan? That would be good to know, one way or another.

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The truth of the matter is that there is no fundamental shortage. The prices have been run up by speculators on "fears" of disruptions in supply. The point is that the windfall tax will not benefit the consumer in the slightest, I don't hear any plan for that money to be rebated to citizens. I find the liberal refusal to allow offshore drilling absolutely unacceptable. Yes alternative fuels need to be funded (and I'm not talking about the ethanol scam) but filling a greater % of our fossil fuel needs at home is the first step in extracating ourselves from the hostage position we are in now. Producing more oil in the states coupled with tax incentives for green energy development will pay off in 10 years or so, there is no quick fix. By the way, what other country if they knew they had oil reserves would prevent people from drilling, certainly not the Saudi's, the Chinese or virtually any other nation. The way the right and left and corporate and environmental lobbies have tied America in knots is rediculous, shame on all of them from both sides of the issue.

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"The point is that the windfall tax will not benefit the consumer in the slightest, I don't hear any plan for that money to be rebated to citizens."

Nail meet head.

I'll put money on the speculators being largel€ Americans though, so the problem is withinn once again.

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usaexpat

what other country if they knew they had oil reserves would prevent people from drilling, certainly not the Saudi's, the Chinese or virtually any other nation

Not only does Saudi Arabia strictly control drilling, it also keeps its actual oil production at least .5 to 1.5 million barrels per day less than its production capacity. The whole purpose of the OPEC cartel is to limit, by agreement between and among its members, the amount of oil that actually is brought out of the ground on a daily basis.

In addition to the high price of oil, the public should be paying attention to the "refining differential," which is the difference in price between the crude oil that enters the refinery and the finished products that come out of the refinery. By blaming the high cost of gasoline on increases in the price of crude oil, the oil companies have been able to raise the amount they charge for refining, with the difference being pure bottom-line profit.

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By the way, what other country if they knew they had oil reserves would prevent people from drilling, certainly not the Saudi's, the Chinese.

But neither is a democracy which allows citizen and interest group participation in policy-making. Although very different systems, both are riddled with corruption which is a hallmark of unaccountable government. However imperfect our system is and however higher prices at the pump may go, few Americans would want to live under those governments.

SuperLib said on another thread that residents of states which will host offshore drilling will have final approval at the ballot box. I don't believe that's the case since water usage rights are controlled by the federal government not the state level. This is the way almost all countries do it.

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"The economy has so far outstripped the Iraq war as the key election issue.."

The thing is, the high oil prices links these two issues like nothing else can.

If gas stays above $4 a gallon, Obama's linking the sagging economy with the unpopular war, and will destroy McCain in the election.

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Taka,

I'm all for ending subsidies of all kinds - including those for corn ethanol aand other green energies (which Obama supports). But I'd oppose caps on salaries or profits. I'm afraid unintended consequences will leave us all worse off. We have only to look to Venezeula to see how quickly the unintended consequences of well-intended, socially-minded government economic reforms have run a nation's economy into the ground.

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After doing a little research I realized I was wrong in assuming the 1981 ban on off-shore drilling was in response to an oil spill off Santa Barbara at that time. In fact that oil spill occurred in 1969, at a station 6 miles off the coast, and galvanized the environmental movement.

Saudi Arabia and China are countries run by dictatorships which don't have to contend with environmental activists and look at the devastation wreaked (most people are familiar with China's pollution, fewer are aware of the Saudi's which is of a lesser magnitude but reflects the same lack of concern for the future.)

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Well if China is subsidizing their oil companies, hey are they state owned any way or what??? Besides that... fine what China does I live in the US and I see the oil companies making record profits while people are losing their homes.. Let us praise China if one wishes, but I will stay focused what is and has been going on in this country.

It is strange to see as a business owner and seller of gasoline , the price of gas being 3.00 a gallon when prices of oil was 70.00 a barrel and a year later again gasoline at 3.00 a gallon when price per barrel hit 100.00 a barrel.. This shows what these oil companies have been doing. I have had to watch this go on for 32 years and because of always wondering what 8,000 gallons was going to take to purchase, I have followed it very closely to see when the 30,000.00 a tanker full was going to come to reality.

This is fact about 3.00 a gallon at 70.00 a barrel and 3.00 a gallon at 100.00 a barrel..

These oil companies are ripping us big time!!!!!!!!!! No one is and has been doing anything about it as these oil companies rake in record profits…

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Taka313 Thanks for the article. I did read about that in a popular Science magazine a while back it is very interesting, but to get all going and something like that in production on a lrge scale is another story that has to have the push from those with power and not a power that would cripple its existence. Our politicians do more to hamper such changes and advancements rather than to bring them forward.

I do see ethanol as a big hoax as when ethanol was pushed before it had to be subsidized by the government to bring the price down because of the expense to make it. So what about sugar cane compared to corn?? Just watched a special on Brazil showing ethanol from sugar cane with a 80% increase of ethanol over corn....And Brazil being totally energy self reliant...because they addressed the problem I think they said 20 years ago...maybe 10, I am not sure the time span they have been concentrating on the issue. I am thinking 20 years. Corn is a waste as for alternative energy , I believe. But with such as advantage sugar cane has over corn, why are these facts being not recognized here in the US when it comes to ethanol as an alternative source? An 80% advantage is really something that should be considered.

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SANTA BARBARA — For decades it has been a bipartisan political staple -- the jaunt to the beaches of Santa Barbara to profess opposition to oil drilling at the spot where a massive 1969 spill despoiled sea life and ocean waters, launching the modern environmental movement....

California has much more virulently opposed offshore drilling than have other states. Political analysts, including Republicans, said McCain's stance suggested a trade-off -- winning votes in key Midwest states on the issue at the cost of losing them in California.

"McCain is essentially conceding what would have been an uphill fight in California in order to strengthen his opportunities in states like Michigan and Ohio," said Dan Schnur, a Republican consultant who worked for McCain in 2000. He added: "Whether this plays in Santa Barbara is much less important than how it plays in Columbus, Ohio."

http://www.latimes.com/news/nationworld/nation/la-na-offshore24-2008jun24,0,1144190.story

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Betzee I'm not sure about to what extent the states can control what kind of drilling is done off of their coast. I'm sure there are ways that a state to impose a ban, whether it be through specifically banning drilling or specifically banning one aspect of drilling that's needed.

I've also been reading a bit about the current leases the oil companies hold. Apparently a lot of them are offshore and in areas that are harder to develop. The new areas being discussed are closer in or on land. In that case, states would be able to have even more of an impact.

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