A Quick Course in the Economics of Confusion - New York Times:
On the Democratic and Republican-in-Name-Only side, we have the idea of "windfall profits taxes" on energy companies. These would presumably mandate a desirable level of corporate profits in one sector on which we depend. (And how long do you think it would apply to only one industry?) If profits exceeded that level, they would be taxed.
As far as I can tell, there is no plan to give a rebate to the companies if their profits have fallen below that desired level.
In other words, the plan is to send this message to energy-company investors, including retirees and pension funds: "Yes, we are in a situation of oil and gas shortage. Yes, we want you to risk billions of dollars exploring for and producing and refining oil and processing gas. But if you succeed for any reason, and even if no price-fixing is found, we will punish you for it."
Not at all.
The US Government's own site states that we gave $2.4 billion in tax breaks and financial incentives to oil and gas companies in 1999, $1 billion in natural gas production. (For some reason, I'm having a hard time finding out just how many breaks we're giving during the Bush administration. Fancy that. We'll just throw in the cost of the Iraqi war and be done with it.) If you'd like higher numbers, here are Greenpeace's for 1995, and they estimate between $15.7 to $35.2 billion, depending on whether or not you want to count defense.
In this, we the taxpayers are the investors. We're providing the seed capital, and we can kiss it good-bye if the companies we give breaks to hit a dry hole. And we should be compensated if the oil companies succeed.
We refer you to this look inside Hollingsworth Oilco for more information.
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