Tuesday, June 19, 2007
Big Tax on Big Oil in Senate
They think you are stupid.
Let me rephrase that, they, the people in our Congress, are certain that you and I are stupid. Or, at least, unbelievably gullible.
They are going to make Big Oil pay! 29 billion dollars in new taxes! Make Big Oil pay for new energy sources. Make Big Oil pay for the high prices at the pump!
There are two facets to this that they don't tell you. Both of them are ways of, basically, taxing you through the oil companies.
The first way that Congress is going to stick it to you through the "hidden tax" of taxing oil companies:
Supposing that this tax is passed, how is "Big Oil" going to get the money to pay this tax?
They are a business. A business is a business. It doesn't matter if it is a "mom and pop", local business or a multinational corporation. When their operating expenses go up, they are faced with one of two choices: a) cut profits (and, thereby, decreasing the available funds to make their business more efficient ... which reduces costs, and, therefore, lowers the costs that have to be passed on to consumers (lower prices for those of you in Arkansas)); or b) raise prices.
Depending on whose estimates you read, Big Oil receives 9-12 cents a gallon in profit. Everything else is business expense.
Depending on what state you live in, your state and federal government receive 40-65 cents a gallon in taxes. In other words, without this new tax, the government makes 3-6 times, per gallon, what Big Oil makes on it's product.
Also, keep in mind, Congress has prohibited Big Oil from developing domestic sources of oil, making us more dependent on foreign oil. AND, they have prohibited both the building of new refineries, utilizing modern technologies, and upgrading the technology in existing refineries within the US. The refineries within the US were built to meet the need of the early 1970's, when there were 70 million fewer in the US. AND, those refineries are state of the art for the early 1970's. Think about what state of the art for the early 1970's was. Let me give you a hint: state of the art car stereos had 8-track tape players. Both of those things have added to Big Oil's operating expenses.
What are they going to do with those expenses, AND the new tax?
Do you, really, think they are going to take a cut in profits?
They aren't. I'm going to tell you why in the next part.
So, if they don't take a cut in profits, then they have to increase the price of their product ... the gas you pump into your car.
Think about that for a second.
Let me put it into perspective. My Karmann Ghia has a 9 gallon tank. So, every time I fill up my tank Big Oil makes less money from me than it costs for me to buy a coke from the machine at work.The government, on the other hand, makes enough to (somewhere in this spectrum) either rent a video for 5 days from my favorite video store or buy a six pack of my favorite, local, microbrew. That's in my Ghia. My Ford F-150 has a tank that is 3 times that size.
That's money you are giving the government for the privilege of buying gas from an entity that is not the government. The government, not only, has no part in producing the product in question, they have, actively, contributed to increasing the price of the product, outside of taxing it.
The second way that Congress is sticking it to you with gas taxes:
Do you have any investments in the stock market?
Let me rephrase that: if you have a 401K, a pension plan, an IRA, or any investments in a mutual fund, then you, in all likelihood, have an investment in the stock market.
Who owns Big Oil?
If your first guesses include: George Bush (either one), Dick Cheney, the board members of Exxon, Citgo, Shell, Connoco, etc.; then you would be WRONG!
All of the companies that make up Big Oil are corporations. Meaning that the ownership of those companies, and, therefore, those who reap the benefits of the profits of those companies, are the stockholders. They vote the Board of Directors, the CEO and CFO (Chief Financial Officer) into, and out, of office.
Board members are just administrators voted into office to run a company and make it profitable for the stockholders.
When the company in question does well, the stock price goes up. Most 401Ks, pension plans, IRA's, and mutual funds, invest in stocks. Big Oil has been one of the most stable profit makers for investors dating back to the 1800's. Therefore, a lot of 401Ks, pension plans, IRA's, and mutual funds invest in Big Oil.
So, who owns Big Oil?
Well, probably, you do.
If this tax goes through, it will cut into profits. Cutting into profits will decrease the value of the stock. Decreasing the value of the stock will cut into the value of 401Ks, pension plans, IRA's, and mutual funds.
Personally, I am a "poor enlisted soldier". My wife and I, both, have IRA's that are investments in mutual funds. Then, we share an IRA that is a "rolled over" 401K into a traditional IRA that invests in mutual funds.
So, the bozos in Congress are telling you how great it is that they are going to stick it to Big Oil FOR You!
Yeah, right, they are sticking it to you in ways you can't see.
I take back what I said in the beginning. I'm not sure I believe:
They think you are stupid.
Let me rephrase that, they, the people in our Congress, are certain that you and I are stupid. Or, at least, unbelievably gullible.
There are two other alternatives:
1) THEY are ignorant, and have no idea of how our economy works.
2) They have become so self-absorbed, and out of touch that they have no idea how what they do affects us.
No matter how you slice it, the old adage "Congress is the opposite of progress." is proved to be right again.
Let me rephrase that, they, the people in our Congress, are certain that you and I are stupid. Or, at least, unbelievably gullible.
They are going to make Big Oil pay! 29 billion dollars in new taxes! Make Big Oil pay for new energy sources. Make Big Oil pay for the high prices at the pump!
There are two facets to this that they don't tell you. Both of them are ways of, basically, taxing you through the oil companies.
The first way that Congress is going to stick it to you through the "hidden tax" of taxing oil companies:
Supposing that this tax is passed, how is "Big Oil" going to get the money to pay this tax?
They are a business. A business is a business. It doesn't matter if it is a "mom and pop", local business or a multinational corporation. When their operating expenses go up, they are faced with one of two choices: a) cut profits (and, thereby, decreasing the available funds to make their business more efficient ... which reduces costs, and, therefore, lowers the costs that have to be passed on to consumers (lower prices for those of you in Arkansas)); or b) raise prices.
Depending on whose estimates you read, Big Oil receives 9-12 cents a gallon in profit. Everything else is business expense.
Depending on what state you live in, your state and federal government receive 40-65 cents a gallon in taxes. In other words, without this new tax, the government makes 3-6 times, per gallon, what Big Oil makes on it's product.
Also, keep in mind, Congress has prohibited Big Oil from developing domestic sources of oil, making us more dependent on foreign oil. AND, they have prohibited both the building of new refineries, utilizing modern technologies, and upgrading the technology in existing refineries within the US. The refineries within the US were built to meet the need of the early 1970's, when there were 70 million fewer in the US. AND, those refineries are state of the art for the early 1970's. Think about what state of the art for the early 1970's was. Let me give you a hint: state of the art car stereos had 8-track tape players. Both of those things have added to Big Oil's operating expenses.
What are they going to do with those expenses, AND the new tax?
Do you, really, think they are going to take a cut in profits?
They aren't. I'm going to tell you why in the next part.
So, if they don't take a cut in profits, then they have to increase the price of their product ... the gas you pump into your car.
Think about that for a second.
Let me put it into perspective. My Karmann Ghia has a 9 gallon tank. So, every time I fill up my tank Big Oil makes less money from me than it costs for me to buy a coke from the machine at work.The government, on the other hand, makes enough to (somewhere in this spectrum) either rent a video for 5 days from my favorite video store or buy a six pack of my favorite, local, microbrew. That's in my Ghia. My Ford F-150 has a tank that is 3 times that size.
That's money you are giving the government for the privilege of buying gas from an entity that is not the government. The government, not only, has no part in producing the product in question, they have, actively, contributed to increasing the price of the product, outside of taxing it.
The second way that Congress is sticking it to you with gas taxes:
Do you have any investments in the stock market?
Let me rephrase that: if you have a 401K, a pension plan, an IRA, or any investments in a mutual fund, then you, in all likelihood, have an investment in the stock market.
Who owns Big Oil?
If your first guesses include: George Bush (either one), Dick Cheney, the board members of Exxon, Citgo, Shell, Connoco, etc.; then you would be WRONG!
All of the companies that make up Big Oil are corporations. Meaning that the ownership of those companies, and, therefore, those who reap the benefits of the profits of those companies, are the stockholders. They vote the Board of Directors, the CEO and CFO (Chief Financial Officer) into, and out, of office.
Board members are just administrators voted into office to run a company and make it profitable for the stockholders.
When the company in question does well, the stock price goes up. Most 401Ks, pension plans, IRA's, and mutual funds, invest in stocks. Big Oil has been one of the most stable profit makers for investors dating back to the 1800's. Therefore, a lot of 401Ks, pension plans, IRA's, and mutual funds invest in Big Oil.
So, who owns Big Oil?
Well, probably, you do.
If this tax goes through, it will cut into profits. Cutting into profits will decrease the value of the stock. Decreasing the value of the stock will cut into the value of 401Ks, pension plans, IRA's, and mutual funds.
Personally, I am a "poor enlisted soldier". My wife and I, both, have IRA's that are investments in mutual funds. Then, we share an IRA that is a "rolled over" 401K into a traditional IRA that invests in mutual funds.
So, the bozos in Congress are telling you how great it is that they are going to stick it to Big Oil FOR You!
Yeah, right, they are sticking it to you in ways you can't see.
I take back what I said in the beginning. I'm not sure I believe:
They think you are stupid.
Let me rephrase that, they, the people in our Congress, are certain that you and I are stupid. Or, at least, unbelievably gullible.
There are two other alternatives:
1) THEY are ignorant, and have no idea of how our economy works.
2) They have become so self-absorbed, and out of touch that they have no idea how what they do affects us.
No matter how you slice it, the old adage "Congress is the opposite of progress." is proved to be right again.
