So when will there be at least talk of a "windfall profits tax" on Bush's

[jasmine621]

oil buddies? If the costs of oil was actually increasing, profits should be falling but instead they are rising astronomically. And why do corporations have to be guaranteed ever increasing profits. Isn't there a profit level that is enough for stock holders to make reasonable gains and owners to make reasonable return on profits? WTF is wrong with people running or should I say, ruining this economy? Why aren't people taking to the streets? We pay more attention to what is happening under someone else's sheets than what is happening on the "street."

[AndyA]

1. You've just revealed the big problem with the supply/demand argument.

It's mostly bullshit.

At least when it comes to oil company profits. It is true, as you said, that if the costs of buying oil, refining it, transporting it, etc., were truly going up and those costs were just being passed on to consumers, it would be expected that oil companies profits would remain stable with what they've been in the past.

So if an oil company made $3 billion annually in the past, and was now just passing along the extra costs to consumers, it would still make somewhere around $3 billion annually in profits, which is a quite respectable profit in anyone's opinion. (In fact, it's a pretty obscene profit.)

But that isn't happening. Now oil companies are making that same $3 billion in profits QUARTERLY. They now earn as much in 3 months as they earned annually a decade ago.

This would only make sense if gasoline consumption per quarter is now as much as it was annually a decade ago. But depending on the source, gasoline consumption has only grown at 1.6% annually over the last decade or so, so one would expect profits to grow in that same neighborhood as well.

But since they aren't, one has to wonder how the oil companies can make so much money if they aren't overcharging at the pump.

And Congress is doing...NOTHING about it. Oh, we are giving the oil companies TAX BREAKS because they need them so badly. :eyes:

[gilpo]

2. The profits are measured as a percentage of revenues

if the revenues are increasing and the percentage stays the same, the profit $'s go up.

That explains why the profit number is so freaking huge. It doesn't explain why it has to be so. That's the real question.

[guitar man]

3. devil...

...snowblower?

I doubt they will ever pay a dime in windfall taxes :(