Redstate

The only trouble is that the majority of people Obama, Clinton and McCain talk to, take these proposals seriously. None of them have a "prayer's chance in hell" of ever knowing what you're talking about and that's because they are hopelessly blinded by the campaign rhetoric ad nauseum. This country's energy policy comes down to "Anything but asking us to disturb our environment to help ourselves." We've let this go on for 30 years, we'll let it go on for 30 more. In the meantime, we'll have to listen to the likes of these three morons talking about tax holidays, windfall profits taxes, and every other screwball idea under the sun. Why? Because it's simple and they won't have to deal with the complexity of making us energy independent.

On the other hand if you wanted to shift taxes away from income and towards consumption such as a tax on fossil fuels then that might meet some of your goals towards promoting conservation and alternate energy. But, you had better make the tax cut more than offset the extra income, to allow for transition costs, and you should make it broad based enough so that it effects everyone, business and consumer.

My choice would be to cut payroll taxes and their matching component as well, and substitute a rise (but not revenue neutral, we need tax relief) in fuels such as a BTU tax.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

in these weighty economic matters, and must keep in mind my own naivete and shoddy thinking, it seems to me that any tax cut is a good tax cut.

It also seems unlikely that the oil companies would, or even could raise prices to obviate the tax holiday. The price at the pump is set by the owner of the pump. Most are owned by independent gasoline sellers, not Exxon or Hugo Chavez.

That fact is lost in the demagoguery engaged in most energetically by the Obama and Clinton campaigns. The people selling the gas have no control over the price of a barrel of oil, since they buy gasoline and diesel from a regional fuel depot, another step removed from the refinery. The price at which they can sell gasoline is further delimited by the competitor across the street, or at the next interchange.

Do they not price their product in such a way as to maximize total profit, and not simply profit per unit? If they were able to raise prices and still achieve sales sufficient to reach a profit maximum, they would do so already. Rather, I think, competitive pressures will do the same thing to prices after a tax cut that they do now, and keep them steady at a lower level. Companies which raise prices past the competition do not sell their product.

That a temporary lowering of prices would increase demand is both farcical and irrelevant. It is farcical because demand is only increased until price responds, and tends to increase supply when it does so. Senator Obama speaks as if supply were static.

More importantly, most driving is mandatory and will continue regardless of the price. That doesn't change during the summer. What we are talking about is the vacation driving season: packing up the kids and driving to Yosemite, Six Flags, or Fenway. A tax holiday on gasoline removes a psychological barrier to that activity, and allows the economy to benefit from a mobile customer base. That should more than make up for revenue losses from dropping the direct tax on fuel.

The reason we don't do away with the fuel tax altogether is because of the mandatory driving built in to the economy.

But the real reason for Obama's opposition to the tax holiday is that he opposes increased consumption of fossil fuels, period. Barack Obama doesn't want you to take that vacation, because it will hurt the planet.

--
Gone 2500 years, still not PC.

I understand that Microsoft makes a pretty good profit - - also Google. Should be 'limit' their profits as well? Which other companies should be targeted?

It is not up to the government to limit anyone's ability to make money or tell them how much.

If Clinton and Obama think differently, why not limit individuals profits for individuals? We could start with George Soros and then take a look at how much money should be made on the stock market. Movie stars and sports stars do seem to make an inordinate amount of money for what they do; and I certainly think television actors are overpaid.

Maybe we should consider limiting the amount of money that our representatives in Congress should make. After all they do seem to make out like bandits after being Senators and Congressmen for years , and putting a limit on their ability to utilize their Washington connections might keep the corruption under control...sort of an extension in some ways of Campaign Finance reform.

The ideas from the candidates regarding the gas problem are not encouraging. I hate to tell Obama , but his don't represent 'change' but more of the same rhetoric we have heard from the left for years.

Neal Cavuto said it best the other day - - instead of choosing between alternative energy sources and actually drilling for our own oil - - do both at the same time. The Democrats are now arguing that drilling in Anwar will not provide oil for 10 years. They have been saying that for 15 years. We could have oil from Anwar right now if we had ignored the 'environmentalists' who are, I believe, largely responsible for this gas crisis. Now, thanks to them, we not only have a gas crisis, but a worldwide food shortage. Thanks guys - - what else do you have in mind.

are the story behind the gas crunch. You may want to read related article at. . . .
http://samuelatgilgal.wordpress.com/2008/05/01/tired-of-high-gas-prices/

Effectively he is talking about nationalization.

If he confiscates 90% of their profits what would be the reason for them to be in business? Why would they bother to produce any oil? They would be far better off to leave their assets in the ground and wait for a more favorable political environment.

Essentially he will be stealing from just about everyone who owns a 401K or a mutual fund.

But why would be surprised that this is Obama's solution? The guy is essentially a communist so it is perfectly reasonable that he would propose nationalization.

But he is probably right about the McCain/Hillary gas tax holiday. The market equilibrium price including the 18 cents is what it is. People are buying gas at that price. If you remove the tax, the price will stay the same and the oil companies will just put another 18 cents in their pocket.

If they really want to give people a break they should cut taxes elsewhere.

"I repudiate the idea of voting for a Democrat

Americans are justly suspicious about the manipulation of oil prices.

But politicians blame oil companies, because sticking it to oil companies is relatively easy--just pass laws and raise taxes.

Blaming the oil-exporting nations of OPEC, such as Venezuela and Saudi Arabia and Iran, is much harder--it could mean a rupture in diplomatic relations or even war. (Bush went to the Middle East last year, and practically begged Saudi Arabia on his knees to lower oil prices. They said no.)

Of the three candidates, only Hillary has said anything about organizing some intensive diplomatic effort to face down OPEC. She suggested suing them in front of the World Trade Organization. I don't know if that will work, but it's worth a try. Maybe all the nations that use oil should form a bloc of their own and bargain for lower oil prices.

By the way: If Bush had been smart, he would have told the Iraqis in 2002: "We'll liberate you from Saddam--but in return, you must agree to withdraw from the OPEC cartel and sell your oil at the global market price." That would have introduced some real competition to OPEC price quotas.

But he didn't do that, Iraq is still a member of OPEC, and they are screwing us over with high oil prices while we continue to shed our blood for them.

Taxes on oil company profits are almost entirely borne by the oil companies because (1) the supply of oil is less elastic than demand (2) the tax is structured to only apply to profits that are above the market interest rates, so investment and production will not be affected (3) much of the profits of US oil companies are from their overseas sales, so even if this does cause prices to increase, the majority of the cost will be paid by other countries.

Pretty much every reputable economist supports higher energy taxes for these and other reasons, including Greg Mankiw, George W. Bush's former chief economic advisor, as well as Martin Feldstein, Ronald Reagan's former chief economic advisor. See:
http://gregmankiw.blogspot.com/2006/10/pigou-club-manifesto.html

But I supppose you know better than Feldstein and Mankiw.

Obama is right, McCain and Hillary are just trying to score cheap points. Fortunately it isn't working, with Obama now ahead of McCain in the pollster.com poll average after being down about 7 points in the middle of bitter/Wright mania.

Of course the oil/gas companies are making a higher total of profits with gas at $3.50 instead of $2.50; however, the margin of profit is the same. $.08 or so per $1. The way to fix this is more supply & refining ablilty.