Obama quietly drops windfall tax proposal

[Freddie Stubbs]

By DAVID IVANOVICH Copyright 2008 Houston Chronicle
Dec. 2, 2008, 10:30PM

President-elect Barack Obama has quietly shelved a proposal to slap oil and natural gas companies with a new windfall profits tax.

An aide for the transition team acknowledged the policy shift Tuesday, after a small-business group discovered the proposal — touted throughout much of the campaign — had been dropped from the incoming administration’s Web site.

“President-elect Obama announced the policy during the campaign because oil prices were above $80 per barrel,” the aide said. “They are below that now and expected to stay below that.”

Indeed, the price of crude has fallen $100 a barrel since its record close of $145.29 on the New York Mercantile Exchange July 3. Obama had long called for using the proceeds from the proposed new tax to give American consumers an “emergency energy rebate” worth up to $500 per individual or $1,000 per married couple.

more: http://www.chron.com/disp/story.mpl/headline/biz/6143968.html

[SwampG8r]

1. ......

[bunnies]

2. I dont like this. Not one bit.

:wtf:

[GarbagemanLB]

3. Why is this an issue? If the price of gas is less than 2 bucks a gallon (where it has been for a

while), and the planned tax was going to fund an energy rebate because of high gas prices....does this not make sense? Gas prices aren't high, so no 'emergency energy rebate' is needed.

[bunnies]

4. Cheaper gas means people no longer need the help?

Bullshit. The economy is in the shitter, people are flat broke or damn close to it, and big oil still reaps their tens of billions in profit per year.

Tell the family on unemployment that the emergency rebate is 'no longer needed'. No recession going on or anything. Nothing to see here.

[GarbagemanLB]

6. Um, the rebate was specifically designed to address the sky-high gas prices. It wasn't meant as a

500 buck or so free-for-all.

Besides, there will be a stimulus package to provide assistance to families likely within the first few months of the Obama administration.

[bunnies]

8. I dont care what it was designed for...

The country is in crisis and nearly everyone except big oil is screwn.

Myself, I'm sick and tired of being porked by big oil - and its high time they contributed something to they people they've been fucking over all this time.

[Freddie Stubbs]

11. What makes you thing that big oil wouldn't simply pass the cost on to the consumers?

:shrug:

[bunnies]

14. Cap the cost.

Screw 'em! :hi:

[Freddie Stubbs]

16. They will simply sell the oil to other countries, causing shortages in the US

[bunnies]

20. Which should be a crime, if it isnt already.

Deliberately hurting the US economy? Manipulating the market?

Time for these assholes to be held accountable. Past time.

[AllentownJake]

30. ahem

Past 8 years.

We should nationalize our oil companies....take over something profitable to pay for all the failing banks :evilgrin:

[BzaDem]

41. How is choosing where to sell manipulating the market?

I mean, really? If I'm a business owner and I decide not to continue to market a product in the US, am I "deliberately hurting the US economy" and "manipulating the market"? Such a law would close down most oil companies, as it would be much more profitable just to leave the US and work elsewhere. Have fun with no energy. Whatever your intentions are, your position is incoherent.

[Freddie Stubbs]

75. Most the world's oil supply is not in the US

[Alter Ego]

19. Right. The Dem Congress already said that they will have a stimulus package

ready for Obama within a few days of him taking the Oath.

[NV Whino]

7. How long do you expect gas to stay below 2 bucks a gallon?

I'd give it a couple of months then back up to $3 or $4. You know, just long enough to let the issue of the windfall profit tax die.

[Alter Ego]

17. True. I suppose if oil is down to $48 a barrel and gas is at about $1.70 a gallon,

I really don't see the need.

Now, when the prices shoot back up with the recovering economy...

EDIT: The problem now is, of course, that folks locked in their per gallon oil prices for the winter during the goddamn summer--when gas was still 4 bucks a gallon. My dad did that--he locked in at 4.23. He's pretty pissed off. I don't think this proposal would have helped those folks--we now need something different.

[MadHound]

22. Umm, perhaps as a preventitive measure.

To keep big oil in line a bit.

[high density]

5. I never thought this was a good idea to begin with

We just pay that tax in higher prices at the pump.

[beachmom]

9. I heard it is better to eliminate tax cuts to oil companies then to implement

a complex windfall profit tax. Plus, of course, the price of oil as the article mentions is not in the same place it was when Obama introduced this feel good proposal.

[Armstead]

10. He ought to keep a mechanism with an "Instant On" when prices reach a certain level

It seems to me -- after the ups and downs of oil prices we've seen -- that the smart thing to do would be to put the pieces in place for a windfall profit tax that could kick in instantly if prices and profits reach a certain level.

That would both serve the purpose when they inevitably go back up again....Plus it would be an incentive for the oil companies not to gouge.

[sofa king]

18. I like that idea very much.

You oughta pass that along to the Big O. I'll bet he'd like it, too.

[Barack_America]

12. Americans have scaled back on usage and prices have plummeted...

...due to the economy.

What "windfall profits" will there be to tax?

[Renew Deal]

13. I think that part of the reason gas is down is that Obama was elected.

The oil companies knew Obama was gunning for them.

[Metta]

15. So begins the dropping to the knees when the corporate masters call.

Backing away from this outrageous ripoff and not repealing *'s tax cuts will cost him in '12. What do you think ignited many voters, B?

[FrenchieCat]

21. It feels like the primaries somehow....and folks believe that Obama should be campaigning for '12

Thank God he's not.

The Bush tax cuts will have expired by 2010...so I don't see that costing him in '12 except for with the most anal of voters; like the 1% of the population, some who post here. The Middle Class tax cut was the promise that Obama made. Repealing tax cuts for the rich was the way in which he was going to pay for it. Currently it appears that he will pay for it out of the stimulus package, and let the Bush tax cuts expire. Sounds reasonable considering the economy.

In addition, the whole point of the windfall profit tax was due to profits and the high price of gas at the pump. There will be a significant drop in profits last quarter on, so backing off something that will be shrinking considerably to not that much is probably wise. That Obama didn't include the revenue from such tax as early as October when the price of a barrel of oil dropped like a lead balloon, shows how ahead of the curve he has been.

[saracat]

38. You are really turning into a pretzel. Everything is justified to you.

[blueclown]

43. Is he/she on Obama's payroll? n/t

[BzaDem]

44. The only response you can make to a reasoned, logical post is a snarky comment?

Figures.

[Pirate Smile]

52. Why do you hate Obama so much? I'm just curious.

[Lilith Velkor]

54. Why do you hate America?

:eyes:

[Pirate Smile]

55. A lot of people criticize him but there are a few that really seem to dislike him to an extreme.

Most people who were even extremely pro-some other candidate and anti-Obama have moved on.

I just figure there is something specific. I'm curious what it is. My question wasn't based on a single post.

Some people have very strong policy disagreements. I think that is different.

[saracat]

62. I don't. I did vote for him after all!

[FrenchieCat]

66. So why personally insult me for posting my response to the OP?

Why did what I say put you off to the point of calling me a pretzel?

Why didn't you just respond in kind and stick to the issues?

[saracat]

68. It isn't insulting to find your logic on all things related to the Prez elect convoluted.

I do not share your admiration of many of his cabinet picks nor do I think he is not to be questioned.I think you would turn yourself inside out to justify any of his picks no matter how egregious they might be.

I do not think the Prez elect is without fault.I voted for him as the lesser of two evils and hope he proves better than that.But I do not hate him. I just don't love him.

[FrenchieCat]

71. You didn't even address the points that I made.....

you simply stated..."You are really turning into a pretzel. Everything is justified to you."

You made it about me, when I was discussing issues......that the truth, and your posts are the proof.

You can try to wiggle out of it, but the truth is that you dislike me and Obama, and it shows.

You were the one in love with John Hedge Fund Edwards. I remember now! You really hated me then, cause I didn't support your candidate. LOL! Looks like you have yet to get over it.

[saracat]

74. Ah speaks Frenchie who chanted Obama's name in a 7/11? and now you are issues oriented?

I repeat , I do not hate anyone, either you or Obama. And the primaries are over.

[Pirate Smile]

67. Cool. Sorry for the question.

Peace. :)

[uponit7771]

23. Obama has said MANY times that he could just let them expire and oil isn't 2343708$ a barrel anymore

...I don't understand the instant cynicism from some

[burythehatchet]

25. I feel like a complete doofus for believing any of the crap that he said.

[AllentownJake]

33. WINDFALL PROFITS

If there are no windfall profits they weren't going to pay a tax on them anyway

[burythehatchet]

35. There was quite a stretch there that I paid through my nose, as did you

that money didn't disappear. It was all inflated profits that were sucked out of my pants.

[AllentownJake]

36. You can't do a retro-active tax

and collect income from a prior period. Even Obama couldn't pull that one politically.

[jesus_of_suburbia]

27. I'm glad it's Obama and not Hillary. Hillary would have been crucified on this board.

[ieoeja]

28. The point of a windfall tax was to force them to lower prices. The threat alone did the trick.

Q. What does a Democrat do when he wins?
A. Complain.

[atimetocome]

24. That oil money was earmarked for his programs but

I forget which one. Does anyone recall?

[AllentownJake]

31. Relief to people paying higher gas cost

No higher gas cost...no relief needed.

[atimetocome]

34. He will need the money--say for road and bridges

[AllentownJake]

37. There won't be windfall profits if gas stays at this level

Just regular profits...therefore the justification and political cover for the additional tax is gone.

[Seen the light]

56. Why would Obama need political cover?

He won in a landslide and has a Democratic Congress. Impose the tax now so that when the windfall profits return, the tax will kick in. Why is that a bad thing?

[AllentownJake]

61. You always need cover to raise taxes

If prices of gas go up, the GOP would blame the increase in prices on the tax. Even if it has no foundation in reality.

[burythehatchet]

26. HAH. You all got PUNK'D!!! (oh yeah, me too)

[atimetocome]

29. and O. also dropped reference that small business would

get some contracts. Not good if this plays out.
................

Removed from site

The change in the Obama camp’s thinking came to light when officials at the Petaluma, Calif.-based American Small Business League noticed the windfall profits tax language had been removed from the transition team’s Web site, www.change.gov, in what the group called “an unceremonious and abrupt manner.”

League President Lloyd Chapman said the Obama camp also has dropped a reference to concern that federal contracts designated for small businesses were being awarded to major corporations instead — a key issue for Chapman’s group.

League officials question whether the omission of attention to that matter and the disappearance of the windfall tax proposal indicate that the incoming administration is already being unduly influenced by large corporations.

[AllentownJake]

32. You need to have windfall profits to be taxxed

Something tells me the oil industry isn't going to be reporting what they reported in the 2nd and 3rd quarter in the 4th.

[Catchawave]

39. How about for 2008 ?

I'm thinking like a taxpayer here :D

[AllentownJake]

40. Is it even constitutional to have a retro-active tax?

I'm an accountant and I've never heard of a retro-active tax on profits.

The only recourse would be legal and that would take years to litigate.

[Catchawave]

45. I'm not sure about corporate tax laws...but....

if I do well for a few months that still shows a "gain" for the year, I pay taxes on it.

My accountant tells me too !

[BzaDem]

46. The poster is talking about changing the tax law retroactively.

Of course people and companies pay taxes on income. The question is can you retroactively change the tax law for the current period or past periods.

[AllentownJake]

60. Correct

The only way I've ever heard it done was in the direction of giving you a rebate on taxes already paid...not increasing your rate on 2008 income in 2009.

[Catchawave]

63. That's above my pay grade...I dunno...

:shrug:

[Thothmes]

65. Congress shall pass no ex post facto laws.

[camera obscura]

42. Bad idea. If he's dropping it now, it'd better come back eventually.

[ShortnFiery]

47. Meet the new boss? This one also "feels our pain" but rewards the haves and have mores first.

Just like good ole' Bubba's Rubinomics. Gawd, I hope my fears are unsubstantiated, but I think not. :(

[gristy]

48. This aid is either clueless or lying

"An aide for the transition team acknowledged the policy shift Tuesday, after a small-business group discovered the proposal — touted throughout much of the campaign — had been dropped from the incoming administration’s Web site.

How hard can it be to peg a windfall profits tax on profits? Duh! When oil prices and profits are lower, the tax (and tax rate) is lower. When oil prices are higher, the tax (and tax rate) is higher. This can all be written into the tax code at the outset.

[BzaDem]

50. Nope. It is not always the case that when someone disagrees with you, they are lying.

There are a few issues here. First, such a tax would be harder to pass (among conservative democrats in the house at the very least). There are many issues that have a much higher priority.

Second, what you are saying doesn't always make sense. For example, if the oil prices are higher because of actual supply shortages, it would not make sense to raise taxes. If, on the other hand, prices are artificially high, that is a different situation.

[gristy]

53. I'll grant you your first point

On your second point, oil prices are always and solely impacted by supply and demand. When there isn't enough oil to meet demand the price increases, and the oil companies' profits go up (unless they sink all those profits into the production of oil that is more expensive to extract or refine).

[BzaDem]

57. I'm talking about speculation

Now yes, technically it is still under the realm of supply and demand. But I am talking about the differences between actual supply shortages and artifically high demand.

[Seen the light]

49. How dare some of you question Obama on this???????????

He's our president and you questioning him on a place like DU is divisive and not productive. You're not allowed to question any of his decisions until he starts actually making policy decis....oh wait, um....not until January 20th at least. There you go.

[BzaDem]

51. Just because people don't agree with you doesn't mean they are forbidding you to speak.

[political_Dem]

58. By letting these taxes be shelved, Bush and his oil cronies benefit.

People need to remember that even as the price of oil fluctuates. It isn't a secret that out of all the institutions folding during the economic crisis, the defense and oil industries are not hurting.

Why is that?

[FrenchieCat]

72. How? Taxes haven't been enacted yet.

And it is my understanding that some corporate taxes will be raised.

Like someone else said, I'd prefer that taxes for corps go up accross the board.
Bush's tax cuts will expire soon. That should take care of that.

[political_Dem]

73. I hope so. Because out of all entities in America, the corporations deserve no more breaks

when their employees suffer and their CEO's get money hand over fist.

[Teacher in SC]

59. Were these windfall profits earned fair and square w/o gov't subsidies?

If so, is it not the nature of capitalism to allow a company to make a profit? Does it make a difference if that company is huge, runs a conservative business model, and makes money for its shareholders? Isn't that what they are supposed to do? Your granny probably lives off having ExxonMobil in her portfolio.

If I start up a company and it does extremely well beyond my wildest dreams, is the government going to move in and take the cream off the top because I don't need that much money? Since when do we penalize profit?

I expect the past 8 years have given the large corporations far more slack than had previously been there. There's a reason they typically push the Republican ticket. Do they fear the Democrats will be playing Robin Hood, or are they concerned the Democrats won't have the business sense to handle the economy?

[Catchawave]

64. I.don't.know...but ...

http://www.youtube.com/watch?v=Hmt0DmiRhTw

...hope this answers your question O8)

[BlooInBloo]

69. I wish he'd tell us, and give us the reason(s) rather than trying to sneak it...

At least, that's how it appeared.

[TheFarseer]

70. it makes less sense with oil at $50

I have never been a big fan of windfall profits. I am a fan of normal taxes hitting their obscene profits.