Canceled.LTroll.29
Banned
"According to Energy Information Administration figures from 2007, crude oil makes up about 58% of what we pay for gas. This consists of finding the crude oil, getting it out of the ground, transporting it to the refinery, maintaining a reserve capacity of crude oil and profit (back to the evil word 'profit' later).
Refining the crude oil makes up another 17%. This consists of producing special blends of gasoline to meet clean air mandates, transporting the gasoline to the stations and profit. Another 10% is added at the retail level for operational and marketing costs and profit. And finally, about 15% goes to federal and state taxes.
It is not the fault of oil companies that their product faces what economists refer to as 'inelastic' demand. When the price of gas goes up, we do consume less. However, our reduction falls by a smaller percentage than the percentage increase in price, leading to increased profits (assuming costs are constant). This is simply a function of a free market.
Punishing oil companies is perverse logic. Slapping on a windfall profits tax will indeed cause gas consumption to fall (as the tax is passed on to the consumer); however, beware of the unintended side effects. Lower oil demand will lead to lower oil prices, which in turn will lead to higher consumption, thereby reducing the incentive to find alternative energy sources.
The ultimate irony is that while oil companies earn about 8 to 10 cents per dollar of sales, the state of Wisconsin earns 32.9 cents for every gallon of gas sold and the federal government takes another 18 cents. So who is gouging whom? Thus, state and federal government receive more than 50 cents a gallon for doing nothing.
At least oil companies are producing the gas, creating jobs, paying taxes and searching for alternative sources of fuel. Oil companies spend billions of dollars on alternative fuel sources. So taxing their profits simply reduces their incentive to continue doing so.
We have placed oil companies between a rock and a hard place. We would not find ourselves in this pickle if we allowed them to drill in the Arctic National Wildlife Refuge and/or made it easier for them to build more refineries. We demand lower gas prices, yet we stand in the way of any potential solution. Then we turn around and curse the oil companies, accusing them of collusion.
Not a single investigation has produced any credible evidence of price gouging, yet we insist oil executives testify in front of Congress for policies created by Congress! Any time Congress messes with the laws of supply and demand, things get worse.
I am continually amazed at the lack of basic economic knowledge on the part of our elected officials. In the name of the environment, we have created our own shortages as the United States has ample supplies of untapped oil. The U.S cannot conserve its way out of higher gas prices since the world's economies are growing.
Furthermore, my guess is that millions of Americans own stock in the major oil companies through their retirement plans."
http://www.jsonline.com/story/index.aspx?id=756359
Refining the crude oil makes up another 17%. This consists of producing special blends of gasoline to meet clean air mandates, transporting the gasoline to the stations and profit. Another 10% is added at the retail level for operational and marketing costs and profit. And finally, about 15% goes to federal and state taxes.
It is not the fault of oil companies that their product faces what economists refer to as 'inelastic' demand. When the price of gas goes up, we do consume less. However, our reduction falls by a smaller percentage than the percentage increase in price, leading to increased profits (assuming costs are constant). This is simply a function of a free market.
Punishing oil companies is perverse logic. Slapping on a windfall profits tax will indeed cause gas consumption to fall (as the tax is passed on to the consumer); however, beware of the unintended side effects. Lower oil demand will lead to lower oil prices, which in turn will lead to higher consumption, thereby reducing the incentive to find alternative energy sources.
The ultimate irony is that while oil companies earn about 8 to 10 cents per dollar of sales, the state of Wisconsin earns 32.9 cents for every gallon of gas sold and the federal government takes another 18 cents. So who is gouging whom? Thus, state and federal government receive more than 50 cents a gallon for doing nothing.
At least oil companies are producing the gas, creating jobs, paying taxes and searching for alternative sources of fuel. Oil companies spend billions of dollars on alternative fuel sources. So taxing their profits simply reduces their incentive to continue doing so.
We have placed oil companies between a rock and a hard place. We would not find ourselves in this pickle if we allowed them to drill in the Arctic National Wildlife Refuge and/or made it easier for them to build more refineries. We demand lower gas prices, yet we stand in the way of any potential solution. Then we turn around and curse the oil companies, accusing them of collusion.
Not a single investigation has produced any credible evidence of price gouging, yet we insist oil executives testify in front of Congress for policies created by Congress! Any time Congress messes with the laws of supply and demand, things get worse.
I am continually amazed at the lack of basic economic knowledge on the part of our elected officials. In the name of the environment, we have created our own shortages as the United States has ample supplies of untapped oil. The U.S cannot conserve its way out of higher gas prices since the world's economies are growing.
Furthermore, my guess is that millions of Americans own stock in the major oil companies through their retirement plans."
http://www.jsonline.com/story/index.aspx?id=756359
