Is HC really this stupid or does she just think you are??

This is actually a better idea than just taxing the oil companies on 'excess profits'. It actually takes the burden off the consumer and puts it on the oil companies. The revenue stays the same, the onus is changed. It means a few more cents in YOUR pocket, as long as the oil companies don't raise the price to cover it.

Her other plan was to 'punish' the oil companies by taxing profits at a higher rate. This leaves the consumer gas tax in place, collects the regular (~35%) tax from the oil companys, and probably causes the oil companies to raise prices. In the first scenario, the consumer wins.

In the second example, the government is the only winner, and we know what THEY would do with the money (visions of the Three Stooges...Hillary, Pelosi and Reid...rubbing their hands together...)

The only reason would be threat of more congressional investigations into price-gouging.

This idea of punishing a company for doing well grates on me. Would hillary set up a cabinet post for monitoring company profits?

Why would and why should they *not* raise the price to cover penny for penny the amount they were sending to the government to replace the tax? A business has to maintain a profit margin.

If I'm a local merchant and the town adds some heavy business tax, I have to raise my prices - if I'm working on a very slim margin, I will go out of business if I don't. If I have to compete directly with nearby businesses in the suburbs that aren't under that same tax, I have to be careful - I may not recover all of the new expense, but I better get some - and in fact it may force me out of business if I am truly oin a shoestring profit margin because I can no longer compete.

The oil companies aren't in that situation. They are making a reasonable profit - not excessive, but not one internal disaster away from going out of business either (like the small business with serious competition - WalMart or whatever). There's no reason for them not to recover most or maybe even all of the tax money that will be taken from them. They don't even have to collude to do it. They all know that their competition are aggressive and will do the same. They have no more incentive not to do that then as they do right now by simply lowering their prices and risk bankruptcy.

Think about it - in today's scenario, if they lower their price 10% to reduce the price at the pump from, say $3.60 to $3.24, they are in negative profits - they go out of business, and before that, they stop investment in new development and efficiency improvements - supplies dwindle and prices ultimately go up. Unintended (but not unpredictable unless one is either stupid or has an agenda) consequences.

This is the kind of stuff that the average person doesn't think thru. It's also why it is deceptive (intentionally or otherwise) to talk about oil company profits only in terms of raw dollars and not most of the time in terms of percent.

Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')

How much cost, in terms of percent, can the oil companies eat before their profit margin is zero? To force their profit margin to zero, how much would be saved at the pump? What effect would that have on industry efficiency improvements, exploration, and R&D (and possibly bankruptcy if other unforeseen events cut further into their revenues)? Who would end up getting screwed even worse in the end (hint: it begins with "consu" and ends in "mer").

Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')

Like Obama you fail to recognize the power of the White House. There are LOTS of oil company tax credits at stake and plenty of cash on hand to pay for the proposed 3-month gas tax reprieve.

I've said this before. Anything but oil and food basics, such as corn, wheat, sugar, etc are Anything Goes. If Apple charges $500 for an iPod, and gets $500 for it, good for them. Do you need an iPod? And someone else will come out with a cheaper alternative.

With oil, we're stuck. No one is going to enter the oil industry on a whim. Oil is something everyone in the country needs, and is what our economy is based on. As we have seen, oil goes up, everything goes up.

But 'punishment' isn't the answer. An incentive is better. Make lees money, and we'll let you keep more of it.

But, leave it to the Democrats to come up with 'punishment'.

But with the price of high grade crude now at around $120 the urge to explore for more must be compelling, but the dims in congress won't let them. It's really stupid.

Yeah, I know. I'm preaching to the choir here.

It doesn't make any difference who writes the check, corporations do NOT pay taxes. All taxes that the government assess on businesses are paid by the consumer. If the government raises taxes on gas by a penny, the price of gas will rise at least a penny. You can call it anything you like... taxes, reimbursement or punishment, the consumer pays it.

That's for sure. I had heard they just found ~4B BBL of oil in...er, Montana? Wiconsin? Somewhere 'up' there. It's a shared oil field with Canada.

We're already paying to import oil from Canada, what's another 4B BBL?

I don't know anything about that - can you explain a little how that works? And is there a mechanism built into what you're talking about that would preclude the oil companies from passing that cost directly to the consumer so that the end result is the same for everybody (oil companies, gubment, consumer) after the money involved is shuffled around?

Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')

Price freeze. Nixon tried it. It doesn't work...