LOL you're being purposefully obtuse XOM makes huge money when the price of oil is high. When oil prices are high, that is the only time when it's profitable to try to produce some of the higher marginal cost sources of oil such as the canadian tar sands, the shale in the rockies, etc. They would never invest in that if there was a windfall profits tax because it wouldn't make sense for them. I didn't say that XOM would go out of business with a windfall profits tax, but it would curb investment. This investment in new technologies/areas has led to a lot of the supply we get today, such as deepwater production. Why single out the oil industry? Why don't we tax the hell out of Apple since they're making money on iPods and iPhones? Why don't we have a windfall tax on google since they're making lots of money on internet advertising? How about pharma companies? see any problem there? lol this is entertaining
you're making very general statements. it would only curb investment to a point where it wouldn't be profitable. Obviously at $10BB a quarter, they are far from not profitable. My point is that you could tax twenty percent of net income and I doubt at $8BB a quarter there would not be any additional investment. sure, the infrastructure to make these profits has been put in place while the price was moving up, but I doubt an analysis that shows a $2BB a less quarter from $10BB would've stopped that investment. because people don't need iphones or ipods or even home computers. it sure is entertaining when people compare buying essentially a luxury item to putting gas in their cars to get to work. the profit would hopefully spur investment in alternatives so we won't be subject to price spikes that have been proven detrimental to the economy
I don't really believe in villafying oil companies either, not getting into another supply/demand/specualtion argument, it is the market that drives the prices. The tax, whether you believe in it or not, is not meant to be punative, as opposed to tobacco another example of taxes not spurring less investment.
I love barraging you with facts that fly over your head. You have a deep desire for revenge against oil companies. You want to punish them for positioning themselves to profit from the run-up in oil prices. Like a non-thinking Obama drone, you've bought into his rabble-rousing bunk about how we should tax these crooks so we can invest in alternative energy (happy happy feel good smiley!) so we'll live in a beautiful world without price spikes. If you want to see price spikes, let's see what happens when oil companies stop investing in higher marginal cost sources of oil - the supply picture would look pretty bad. Hey Obama, why don't you quit looking for additional ways to tax people and businesses like its your God-given right. Tax and spend, baby
you know texxx you're usually better than trader with not resorting to rhetoric, you have not proven anything. tell me this, did exxonmobil really think they were going to be making $10BB a quarter on existing infrastructure five years ago? They aren't making money off investment, they are making money because of a huge spike in demand from china and india, which honestly they weren't even prepared for and eventually hurt the market. thus the demand destruction.
"re-invest" ? In what? New office supplies? Don't say new fields because with the price falling that would be the wrong thing to do. They just keep pumping what they have, which they will be able to sell profitably at $20 or $200. They have tons of cash on hand that a credit shortage makes no difference for them, and their AAA ratings are pretty much untouchable anyway. There is no possibility of this. none.
Oil companies usually sit on a lot of current assets because they know the nature of their industry - volatile. Considering how fast the price went up (creating reserves of liquidity) they should be set to counter the oil prices which will inevitably go back up gradually. Nothing to worry about. It will take an idiotic mistake of epic proportions to make oil companies ask for a bail out. Not to mention oil companies won't take orders on how to run their business in exchange for bailout money.
