News-Record.com

Give us a break, governor. There is no windfall profits tax, and there isn't going to be one. Certainly not this summer, and probably not ever because it doesn't make sense*Doug

You got that right! I am suprise that you didn't remind the Governor of his windfall profit lottery tax as another shinning example of free markets at work.

Let's face it! The Clintons are throwing everything at the wall and see what sticks with Easley. Did you see the janitorial crew on the King show cleaning and scaping Easley off the carpet after the show?

Doug, I wouldn't go so far as to say that taxing oil-industry profits makes absolutely no sense. But it comes darned close. Here's a pretty good run-down of the issue:

http://money.cnn.com/2008/05/06/news/economy/oil_profits_tax/

I agree with two of the piece's main points. First, oil-industry profits are indeed not as huge as they seem when expressed as a profit margin, and other industries command larger margins. If the reasoning is that we should tax highly profitable industries, then shouldn't we tax those other industries first? Second, it's getting more and more expensive to find new oil. If we want the oil industry to explore and invest in new technologies, we might just have to "let them" have their profits.

But I'm not sure I agree with the final point. Much research has shown that private industry generally doesn't invest enough in basic (as opposed to applied) research. That's why it makes sense to use tax money to fund government laboratories and university research. So in my book, the only justification for a tax on "windfall" oil profits (if those could even be defined!) would be if the proceeds were used to fund basic research on alternative fuels and technologies.

Of course that means that paying for a summertime gas-tax "holiday" would not justify this tax.

Food prices are going up. Who's going to suggest slapping a windfall profits tax on farmers?

That's a good parallel, Doug. Food prices, like oil prices, are rising due to structural changes in global demand (though food price rises are also getting an assist from our odd ethanol policies). At lower prices, oil producers would be profitable and farmers would be somewhat profitable, but both are doing quite well now that external factors are going their way.

First, oil-industry profits are indeed not as huge as they seem when expressed as a profit margin, and other industries command larger margins* Andrew

Does 40 billion dollars net profit by Exxon ring a Bell or do you prefer a reasonable net profit of 100 Billion dollars as other Globalist Corporations

It was actually closer to $41 billion in 2007. What's your point? That large profits are fair game to be confiscated by the government, regardless of whether it makes sense to do so?