There is a move afoot in the U.S. Senate to force oil companies to give a tenth of their profits to several worthy causes, such as relief of the poor in the cold northeast. Beside the fact that this is outside the scope of U. S. lawmaking ability, the idea has a great deal more dumbness attached to it.
Oil company profits are large in lump sum amounts but not as a per cent of sales. Therefore news media and populist senators talks in terms of the total amount, not per cent of sales. They seem to forget that profits are used to pay taxes. Since profits are taxed twice, they pay lots of taxes. Profits in the form of dividends are also used to help stockholders make ends meet.
Congress wants to stop oil companies from drilling for more oil. If they allowed more drilling, supplies would increase and prices would fall. But Congress wants no part of that. It wants more dependence on offshore supplies, less domestic supply and profits handed out so as to impoverish stockholders. (All oil stock holders are not rich--many are ordinary people who live on their dividends). Some senators are very liberal with other people's money.
In the final analysis, corporations do not pay taxes. They simply pass them along to the users of their products. The largess of congress with oil company profits may well result in another price increase.
It goes back to the notion that all money belongs to the Government. The Government just lets us keep some, part of the time.
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