Page 7 of 9 FirstFirst ... 56789 LastLast
Results 61 to 70 of 84

Thread: Senate blocks bill repealing $2 billion in oil tax breaks

  1. #61
    Sage
    jamesrage's Avatar
    Join Date
    Jul 2005
    Location
    A place where common sense exists
    Last Seen
    Yesterday @ 09:23 PM
    Gender
    Lean
    Slightly Conservative
    Posts
    31,067

    Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by solletica View Post
    A monopoly/oligopoly already sets the price for its product at a point that maximizes profit for it.

    Unless there is a change in demand for the product, or a change in the production costs for that product, any change in price in either direction would result in a loss of profit for that firm.
    If its a practically a monopoly then you have no other choice but to buy their product.





    Consequently, increasing the tax on, say, oil company profits will have zero impact on the price of crude.
    Of course it will have an impact on the price of crude,it will be miniscule enough that you do not notice. To say it will have zero impact on the price of crude is simply false.


    For all practical purposes, only things that could increase crude prices are increases in the actual production costs of crude (which doesn't happen very often) or an increase in demand.
    Taxation is part of a production cost just like labor,land,materials and other stuff.
    "A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murder is less to fear"

    Cicero Marcus Tullius

  2. #62
    Student
    Join Date
    Jan 2011
    Location
    Chicago area
    Last Seen
    11-06-13 @ 06:56 AM
    Gender
    Lean
    Conservative
    Posts
    234

    Attn1 Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by solletica View Post
    That calculation technique would generate no price change on a microeconomic scale. For a specific business, the product price at which net (after tax) income is maximized is the same as the one for which gross income/profit is maximized.

    The increase in price due to taxation of businesses within a competitive industry is due to the left shift of the supply curve for that whole industry (since taxation creates a disincentive for businesses to operate in that industry)--a macroeconomic effect.

    One that shift is made, the market price increases, and all businesses within that industry have to charge that same price (or else lose money). And I already acknowledged that fact in my other post.

    Where you're confused--despite your economic knowledge--is that the above does not happen for an oligopoly or monopoly like the oil industry.

    In those, an increase in the tax on those industries does not left shift the supply curve, since those few companies are the supply, i. e. the companies' own marginal cost curves are pretty much the whole industry's supply curve (since there is no one else).

    None of those players are going to exit the industry or cut back on wells because of an extra income tax, because the tax wouldn't create a sufficient incentive for them to do so.

    And those companies already set the price at a point that optimizes profits for them based on the global demand for oil, and their own drilling/refining costs.

    Consequently, increasing the tax on, say, oil company profits will have zero impact on the price of crude.

    For all practical purposes, only things that could increase crude prices are increases in the actual production costs of crude (which doesn't happen very often) or an increase in demand.

    The latter is the most common case.
    You Keynesian's never cease to amaze me. A lot of theory but no basis in fact and the relationship between tax law,margins and corporate profits. You must understand that when Keynes proffered his theory, taxation of individuals and corporations was still in its infancy--a non-player in the current economic model. So regardless of how the supply curve may or may not be affected still has no bearing on the price of gasoline that we both pay at the pump.

    Your above post focus's on the price of crude (and demand) as the sole determining factors in corporate profits of oil companies. Furthermore, you state that ' those companies already set the price at a point that optimizes profits for them based on the global demand for oil, and their own drilling/refining costs.' However, you fail to realize that it is the collective world market which dictates the commodity price of oil, not the individual oil companies. From that aspect alone your original post on the topic (the one I first responded to) is misguided.

    While we both are in agreement that increasing taxes on the oil companies profits will have zero impact on the overall price of crude (as a commodity), you can't escape the fact that when you tax into a corporations margins, said corporation will respond in kind and pass that cost onto the consumer or increase operational efficiencies like cut labor. This is especially more prevalent in situations where we are dealing with a monopoly or oligopoly, where there are few players in the competitive marketplace to harness back price points.

  3. #63
    Student
    Join Date
    Jan 2011
    Location
    Chicago area
    Last Seen
    11-06-13 @ 06:56 AM
    Gender
    Lean
    Conservative
    Posts
    234

    Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by solletica View Post
    A monopoly/oligopoly already sets the price for its product at a point that maximizes profit for it.

    Unless there is a change in demand for the product, or a change in the production costs for that product, any change in price in either direction would result in a loss of profit for that firm.
    EXACTLY SOLLETICA YOU JUST NAILED IT ON THE HEAD!!!!!!!!!!!!!!!!!!!!! Your second sentence is profound. Now to lead you down the road to enlightenment, which of these costs from a business sense is income taxation? Is it not a production cost? If you agree that income taxes are indeed a production cost, you just assisted me in proving you wrong. You are essentially in agreement then (based off the above sentence) that an increase in income taxes on the oil companies, is going to be passed on to the consumer (i.e. you and I). Very well done.

  4. #64
    Disappointed Evolutionist
    Catawba's Avatar
    Join Date
    Jun 2009
    Last Seen
    05-28-13 @ 08:15 PM
    Gender
    Lean
    Liberal
    Posts
    27,254

    Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by Nevergolfpar View Post
    EXACTLY SOLLETICA YOU JUST NAILED IT ON THE HEAD!!!!!!!!!!!!!!!!!!!!! Your second sentence is profound. Now to lead you down the road to enlightenment, which of these costs from a business sense is income taxation? Is it not a production cost? If you agree that income taxes are indeed a production cost, you just assisted me in proving you wrong. You are essentially in agreement then (based off the above sentence) that an increase in income taxes on the oil companies, is going to be passed on to the consumer (i.e. you and I). Very well done.
    Thought maybe you missed this post back a few pages:

    "the nonpartisan Congressional Research Service concluded that eliminating the tax breaks would be unlikely to result in higher gasoline prices, which are influenced by a host of factors. The report said the bill would raise about $1.2 billion in 2012. By comparison, the five oil companies had combined revenues of $1.5 trillion last year."
    Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children. ~ Ancient American Indian Proverb

  5. #65
    Professor xpiher's Avatar
    Join Date
    Apr 2011
    Last Seen
    04-23-12 @ 10:33 PM
    Gender
    Lean
    Libertarian
    Posts
    1,993

    Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by Nevergolfpar View Post
    EXACTLY SOLLETICA YOU JUST NAILED IT ON THE HEAD!!!!!!!!!!!!!!!!!!!!! Your second sentence is profound. Now to lead you down the road to enlightenment, which of these costs from a business sense is income taxation? Is it not a production cost? If you agree that income taxes are indeed a production cost, you just assisted me in proving you wrong. You are essentially in agreement then (based off the above sentence) that an increase in income taxes on the oil companies, is going to be passed on to the consumer (i.e. you and I). Very well done.
    Or the company can just eat the profit loss, like they should. Evil maximum at its finest.

  6. #66
    Student
    Join Date
    Jan 2011
    Location
    Chicago area
    Last Seen
    11-06-13 @ 06:56 AM
    Gender
    Lean
    Conservative
    Posts
    234

    Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by Catawba View Post
    Thought maybe you missed this post back a few pages:

    "the nonpartisan Congressional Research Service concluded that eliminating the tax breaks would be unlikely to result in higher gasoline prices, which are influenced by a host of factors. The report said the bill would raise about $1.2 billion in 2012. By comparison, the five oil companies had combined revenues of $1.5 trillion last year."
    Thanks for the insight, but no I did not miss it. The CRS like the CBO are the nation's calculator--you plug in the data, it spits out the results independent of other contributing variables like opportunity costs etc... These 'think tanks' do not have the ability to make assumptions with a high degree of accuracy. As a result they data mine to the extent that variables are known. For example, CRS has no way of accounting for how an oil company will react should the Federal government eliminate the tax subsidies. The decision makers in the oil business are not static in their thinking, they will find a way to reduce their tax liabilities or adjust for the lost revenue. Unknown variables such as how an oil company will react never get plugged into the data model, thus can never be accounted for as accurate analysis. So when the CRS says that gas prices will not be affected, take what they say with a large 'grain of salt'. In the meantime, I will rely on my own logic and wisdom when assessing how an industry like oil will react under such scenarios, independent of the CRS.

  7. #67
    Student
    Join Date
    Jan 2011
    Location
    Chicago area
    Last Seen
    11-06-13 @ 06:56 AM
    Gender
    Lean
    Conservative
    Posts
    234

    Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by xpiher View Post
    Or the company can just eat the profit loss, like they should. Evil maximum at its finest.
    Give me one valid reason why any company should 'eat the profit loss, like they should'? Furthermore, how is this evil?

  8. #68
    Professor xpiher's Avatar
    Join Date
    Apr 2011
    Last Seen
    04-23-12 @ 10:33 PM
    Gender
    Lean
    Libertarian
    Posts
    1,993

    Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by Nevergolfpar View Post
    Give me one valid reason why any company should 'eat the profit loss, like they should'? Furthermore, how is this evil?
    Evil Maximum is from a very specific book. Maybe you should Google the phrase and enlighten yourself.

  9. #69
    Student
    Join Date
    Jan 2011
    Location
    Chicago area
    Last Seen
    11-06-13 @ 06:56 AM
    Gender
    Lean
    Conservative
    Posts
    234

    Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by xpiher View Post
    Evil Maximum is from a very specific book. Maybe you should Google the phrase and enlighten yourself.
    You still have failed to answer my questions?

    As for the phrase 'evil maximum', I have spent some time enlightening you, maybe you could reciprocate? Then again, maybe not because I probably would not read it anyways.

  10. #70
    Tavern Bartender
    Constitutionalist
    American's Avatar
    Join Date
    Mar 2006
    Location
    Virginia
    Last Seen
    Today @ 03:45 PM
    Gender
    Lean
    Conservative
    Posts
    76,262

    Re: Senate blocks bill repealing $2 billion in oil tax breaks

    Quote Originally Posted by disneydude View Post
    Republicans have never seen a corporate welfare bill that they haven't loved.
    Looks like you passed hackery 101.
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
    "Fly-over" country voted, and The Donald is now POTUS.

Page 7 of 9 FirstFirst ... 56789 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •