November 9th, 2008, 01:52 AM
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#11 (permalink)
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Join Date: Aug 2003 Location: PA, USA
Posts: 18,933
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Originally Posted by MTAtech  On windfall profit taxes, you're proceeding from the assumption that oil companies are entitled to 30% profit margins and if the government raises taxes on those profits, the company will raise their gas prices to match. Any first year economics student can see the flaw with that logic. Gasoline consumption is elastic. If the gasoline price is raised, consumption drops, earning the company less profit than if they did not raise prices.
The result of a windfall profit tax is that the oil company will pay more taxes and have less profits. | Uh, yeah...try 10% for Exxon Mobil, 10% for Chevron, 7% for Hess, 7% for Conoco Phillips, 8% for BP, and 6.5% for Shell.
Kellogg brings in 10 cents for every $1 of sale...I guess they are subject to the windfall profit? How's $10 Cheerios sound?
You know that thing called "sales tax" that most states have? Guess who pays it. I'll give you one guess, and it's not the vendor. Your theory that the companies would somehow incur the tax without raising prices is infantile. |
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