Many democrats want to take away profits from big oil. They also think that somehow the tax cuts increased the price of oil. After all, its not like we're in a war or anything. Would taxing them lower gas prices, or would the prices go up to makeup for the taxation? Even if the government would try to subsidize people who pay for gas, it wouldn't make much difference considering that the profits from oil companies aren't that great. Banks and credit card companies make more. And if taxation is to high, maybe the government would have to subsidize the oil companies just to they can stay in business.
2007-07-27 06:28:52 · 22 answers · asked by privatize 1 in Politics & Government ➔ Politics
Yes, taxing things makes them cheaper.
What? Have you ever studied any economics?
Taxes make things cost MORE. There is no other way it works. It doesn't matter if it is a sales tax (direct increase), an income tax (makes the company pay employees more which makes the good cost more), a business tax (which reduces their profits so they charge more because business is in the business of making money), or requiring increased benefits (same as income tax).
Business will make money or declare bankrupcy (which then costs us all). Taxes, no matter who they are applied to, makes things cost MORE.
2007-07-27 07:07:01 · answer #1 · answered by Scott L 4 · 0⤊ 0⤋
How old are you? You surely didn't get this full of crap in under 60 years? Good lord people. The government tax is 19 cents a gallon. My state tax is 21 cents a gallon. How in the hell does that compute to most of the gas prices? 10 cents a gallon profit? That is ridiculous. So you are telling me that people are using more gas at 3 bucks a gallon than at 2? Get real. I heard a oil company executive say they made 8 cents on the DOLLAR. So if the price is 2 they make 16 cents a gallon. At 3 per gallon they would make 24. Which makes a whole lot more sense.
2007-07-27 06:54:26 · answer #2 · answered by Anonymous · 2⤊ 2⤋
Gas is already taxed. The big oil companies make about 8 cents on a gallon of gas, the US government makes about 50 cents on the gallon. By the way, Clinton/ Chavez arbitrarily wanting to take profits from the oil companies in an insane idea. The long term effects of which would devastate the economy and ultimately raise gas prices to double what they are now. Has Clinton/Chavez given even an iota of a thought as to how our econmoy works? What about the millions of people who invest in oil companies, that would stop. What about the oil companies who exist to provide a commodity and make a profit? That would stop. Do you really want oil companies fleeing the US like they are in Venezuela? She is insane.
2007-07-27 06:31:14 · answer #3 · answered by booman17 7 · 6⤊ 1⤋
The whole basis for a windfall profits tax is wrong and here's why. It assumes the gov't knows how much profit is appropriate for the oil industry. Anything above that is gouging and should be punished.
So what happens the oil industry goes through a slump again, as it did for much of the 90s and early 2000s. Will gov't step in and give the oil industry subsidies to help it earn the appropriate amount of profits that they've determined?
2007-07-27 06:35:57 · answer #4 · answered by Uncle Pennybags 7 · 5⤊ 1⤋
If demand for gas was elastic, taxes might actually decrease price by decreasing demand.
Unfortunately, gas demand is inelastic. Regardless of the price, most people are going to use pretty much the same amount (at least up to the minimum threshold of driving to work, school, grocery store, etc). In this case, tax increases directly cause price increase.
We could drop the price by 50 cents a gallon by revoking current state and federal gas taxes, but they pay for our roads. A tax on gas to pay for roads is more fair than an income tax to pay for roads, so I'm fine with it. I just don't complain about the price..
2007-07-27 06:33:57 · answer #5 · answered by freedom first 5 · 4⤊ 1⤋
increasing the taxes would only lead to higher prices be passed down to the consumer. more of a product leads to lower prices.
I'm not sure of the number exactly but I heard the oil companies only make 10 cents a gallon profit. The reason they making so much money is that people are using more gas, a lot more.
2007-07-27 06:33:44 · answer #6 · answered by Monte 4 · 2⤊ 2⤋
The government is already taxing gas. I just wonder where the money is going? I live in Michigan and the tax is supposed to go to fixing up the roads, but the roads are cracked and full of pot holes EVERYWHERE! I even bent my rim on one less than a month ago.
2007-07-27 06:52:53 · answer #7 · answered by Jen 3 · 2⤊ 0⤋
In almost any realistic case I can think of, raising a tax will increase the cost to the corporation, so he will raise his price. This will occur in perfect or imperfect competition. This is because in both cases a firm sets his price at a quantity where the extra cost equals the extra revenue. Supply is upward sloping, and shifts in due to higher costs.
The amount that is passed on depends on the elasticity of the curves. If they are equally elastic, only 1/2 the tax will be passed on.
2007-07-27 06:44:22 · answer #8 · answered by Anonymous · 2⤊ 1⤋
Gas is taxed, although in the states not nearly as much as in much of Europe. What has been the result there? Far more efficient cars, less reliance on cars, and more reliance on public transit and other methods of transportation. Now, if taxes increased on fuel, the overall cost of fuel would increase. If the government consistently raised taxes on gasoline, oil companies couldn't just keep lowering prices to compensate.
Profits from oil companies aren't that great? I'm not too sure what you mean by that as their profits are quite great.
2007-07-27 06:35:13 · answer #9 · answered by Anonymous · 1⤊ 4⤋
Gas is already over taxed. Raising the tax on it would only make the companies raise their prices to maintain profits.
2007-07-27 06:32:09 · answer #10 · answered by Jason J 6 · 3⤊ 1⤋