Re: Motivation for the Oil Barons

The Trucker wrote:
> In a tread entitled "BEFORE Trying To Simply Hike the Fuel Tax . . ."
> Day Brown <daybrown@[EMAIL PROTECTED]
> wrote:
> ******************
> Now, in this case, I dont blame the oil outfits for not looking for new 
> sources of alternative energy. They know how to make money off oil, and 
> are not keen on some new technology to compete with it. Very well. Tax 
> the bastards to motivate them. Profits are positive re-inforcement, 
> taxes are negative re-inforcement. They both work.
> **********************
> 
> The Taxation of oil company profits is in fact a tax on rent that will
not
> be passed to consumers.  If the oil companies could get higher prices
they
> would already be doing it.

They haven't. Why did oil prices drop so precipitously after 1983? Oil
companies themselves are largely gutted. They went from Silly Putty to 
Enron.

> And so long as the proceeds of the tax are
> disbursed to the general public it won't make any difference anyway.

Right. Once it's disbursed to everybody, it effectively
disappears.

> So a
> 100% surtax on oil company profits in excess of X simply redistributed
as
> a quarterly "stimulus" in the same form as the present "stimulus" will
do
> very nicely.

You were doing pretty well up to that point. Best I can tell. Once it 
becomes expected, it's background and it doesn't influence behavior
much anymore.

  As oil prices increase driving profits above X then the oil
> companies get the wrench. That is some serious motivation to help in the
> effort to reduce the prices.
> 

We've had twenty five years of reduced prices, at very high cost.

> As the definition of X can become quite complicated, it is better to
> simply apply a lower tax rate to the entire profit. Say 50% so long as
> oil prices remain above $80 per barrel.
> 
> 

I have no doubt but what this will happen, and I can only consle myself 
with the knowlege that I won't live long enough to see the end result.

*If* you can capture rent towards replacing oil, then it makes sense.
Only if. Anything else is rearranging the deck chairs on the Titanic.

--
Les Cargill