OAK BROOK, Ill. -- A proposal to tax oil company profits and possibly even force the breakup of major oil corporations got a relatively chilly reception from CSP Daily News readers last week. A solid 50% of respondents to a Daily News Poll opposed the idea of breaking up the oil companies, while other feedback received on the proposals to tax oil-company profits from U.S. Senators Charles Schumer (D-N.Y.) and Dick Durbin (D-Ill.) was soundly negative.
This sounds pretty un-American and anti-capitalistic, wrote one CSP Daily News reader. It is amazing [image-nocss] how easily their people allow them to go out into the public arena and expose their ignorance of economics and how the commodity marketplace works. What is next, regulation of coffee? I don't think that Starbucks should be able to charge $3 for a cup of brown water'.
Schumer's proposal, introduced as the REPAIR Act, or Recapture Excess Profits & Invest in Relief, calls for a temporary levy on oil companies' windfall profits to help pay for Katrina relief. He said the levy would amount to 50% of the profits the big oil companies are going to make this year because of the high price of oil.
He also proposed the forced breakup of big oil companies so that there are 10 or 15 companies as a last resort if gasoline prices do not come down. If we do nothing, we may wish for the days of $2.89 gas, Schumer said last week.
Half of the 283 respondents to a CSP poll that asked Do you think the federal government should break up the major oil companies? said no to the question: 35% said yes; 12% said maybe; and 3% said I'm not sure.
Meanwhile, Durbin proposed a new tax on oil companies' excessive profits last week, saying the money could help consumers cope with the high cost of gasoline and heating oil. The tax money could be used to give consumers a $150 rebate, help poor families pay their home heating bills and provide $1 billion in incentives for auto companies to improve fuel efficiency, he said, according to a report from the Associated Press.
All three proposals brought out frustrations from CSP Daily News readers.
I am a firm believer thatthe laws of supply and demand will solve the gas priceissue, wrote one reader. If gas [prices] get too high, then I personally will either buy more efficient automobiles or drive less.If I purchase less gas, then the prices will come down; free trade at it's best. As for the oil companies profitsput in place a flat taxif an individual or business entity makes X' (sales minus expenses, period),then they will pay X.' If the oil company profits rise by 200%, then the tax dollars they pay will rise accordingly.
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