i'm going to tax these profits

http://www.cnn.com/2008/POLITICS/02/27/energy.taxes.ap/index.html

Have we had enough of these people who don't understand economics trying to make economic policy? How would raising taxes on these companies encourage them to increase supply (something they can't raise because drilling rights are often cut off by these same politicians who want them to increase supply), or decrease prices (something they can't do because again, they buy the oil first from the land or oil well owner). In fact what raising taxes on a corporation does is encourage them to do less. They would still be profitable at lower quantity of sale. Additionally most of these companies because of government regulation don't just pursue oil. It's become profitable to have other energy sources in a company portfolio. Are we taxing those too, or just the oil sector portion of it?

Finally what do they do with those profits? Two things usually happen. Either, the company takes them and shares them with it's public stockholders (if it's a publicly traded corporation). Which happen to be most of the American work force because energy companies have been golden childs on Wall St (thus subsidizing them for buying oil already in a way). Or they re-invest them in capital searches for new sources, alternative energy, etc as a means of competitive advantage. Which is precisely what we want them to do. The fact that oil is over $100 a barrel does not mean that oil companies or gas stations for example are raking in a huge profit on every barrel they sell. It's roughly 8%. People constantly overestimate the levels of profit in most industries, mistaking the large numbers for high margins. Most industries have enough competition to keep the margins down. Oil, because of some regulation and the legal collusion of OPEC, has a good deal of inefficiency present, but the margin itself is generally controlled and monitored. Which is why we have these silly price gouging complaints every summer when it's simply the market price for oil. There's very little chance of a large oil company gouging on price. Where I'd be concerned is the number of banks/insurance companies that have purchased naming rights for stadiums.. where is that money coming from? Money for nothing. If we want the price of oil/gas to go down, find ways to use less of it. It goes down then individually as it has less impact on us.

The greatest deal of hubbub has come over things like Exxon's CEO retirement package of 400 million over 20 years. Since this is like saying he's getting a 20 million dollar bonus per year, let's see what that means also. Did Exxon make billions of dollars as a company. They did and still do. Are they making more profit wise than other oil companies, they are. Could that be because of the CEO? Quite possibly. It's true that the hundreds of thousands of anonymous workers out there have done fine works of their own to deserve some compensation. I would prefer that a company take care of it's workers first and then also it's bosses because of the concept of enlightened capitalism (workers can be paid more per hour and be still more productive for a company for example). But for CEO's it's much like sports free agency. If someone does well, they can run off to another competing company if that company will give them more money. Usually a publicly owned corporation has a board that oversees some things like how much money the boss gets. If they approved this, it's a means of paying for talent of some sort. It is silly assumption that paying him this money takes it away from others, when in fact, it probably generated more money for those others (stockholders especially) than it takes away (net profit to me, negative 59 dollars, oh please take my 59 dollars I don't want it). I don't agree that a person should need 400 million in retirement benefits personally, but if that's what it takes to keep a talented CEO these days. I can live with that.