Some Americans are sheeple that will cheer for the windfall profits tax, but for those of you who are not, or at least want to understand what this means, you need to understand who that tax will be levied on.
You can read this breakdown (by the way, this was the Clinton's Undersecretary of Energy and Commerce, not some Right Wing analysis):
http://www.energytomorrow.org/...Shapiro_Pham_Study.pdf
To break it down for you:
Only 1.5% are owned by oil company executives.
Almost 43 percent of oil and natural gas company shares are owned by mutual funds and asset management companies that have mutual funds. Mutual funds manage accounts for 55 million U.S. households with a median income of $68,700.
Twenty seven percent of shares are owned by other institutional investors like pension funds. In 2004, more than 2,600 pension funds run by federal, state and local governments held almost $64 billion in shares of U.S. oil and natural gas companies. These funds represent the major retirement security for the nation's current and retired soldiers, teachers, and police and fire personnel at every level of government.
Fourteen percent of shares are held in IRA and other personal retirement accounts. Forty five million U.S. households have IRA and other personal retirement accounts, with an average account value of just over $22,000.
You see, "Big Oil" is you, and me.
I know that some of you are going to say "I don't own any mutual funds with oil company stock!" or "I only invest in green energy funds," Well do you have a bank account or a credit card, or a home loan, or a car? Do you work for the state, or a privately held company with a retirement plan? Do you go to a school that is funded through public bonding?
There is simply not enough time to trace it all out for you, but in a nut shell, Mr. Obama is threatening to punish our economy because he knows you don't know any better.
He knows what he's saying, and who he's talking to. A "windfall profits tax" on an industry that is 98.5% publicly owned is simply a proposal for another inefficient redistribution program. You see he wants to use the tax funds not burnt in the bureaucracy to help you pay for energy. Just keeps prices high in an already over speculative industry.
Now do your own research. You will be less susceptible to this type of pandering.
The good news is that he can't possibly be this stupid. I think he understands that this type of promise will have to be gutted before he takes office. He has no intension on tanking the US economy for the sake of growing government. At least I hope.
The speculative profits in the oil industry are taken outside of the US by the Saudis, by the refineries in Venezuela, and by every other foreign country & company responsible for supplying us with our energy. So he is offering to punish us rather than them! . . . and you know what? The American people are going to cheer!
Cliff's Notes Version:
Negatives:
- Instant reduction in pension funds, IRA's, 401Ks, and mutual funds
- Punish profitability
- Discourage further production
- Competitive disadvantage for American firms (benefits State oil Co of China, Saudi Arabia, Venezuela, Iran, etc.)
- Encourage large oil companies to move over seas
- Environmental damage (American oil is among the most environmentally regulated)
Positives:
- marginal increase in governmental revenues
How does this help solve the problem? At best, they will take money from my investments and give a small percentage of that back to me. I just don't get it.
If the oil companies are doing some sort of market manipulation that is illegal, nail them. If they are just making lots of money off of us oil addicted fools, so what?
It is a socialist idea that making profits is a vice; I consider the real vice is making losses. ? Winston Churchill