Impose Windfall Profits Tax – Why?

Because consumers don’t like paying higher prices for gasoline? Because consumers don’t want to give up their SUVs and Hummers? Because the supply is shrinking and demand is rising and consumers are in denial? What about taxing Apple Computer’s excess profits on their new iPod nano? What about the excess profits some of those SUV drivers are making on the real estate they are ‘flipping.’

“Market research firm iSuppli says that Apple’s margins on the iPod nano could be as high as 50 percent, making the extremely thin player as profitable as earlier models of the iPod. ”

“Real estate prices have risen dramatically in recent years, with annual appreciations of 20 to 30 percent in some areas. The study shows that flippers obtained returns far in excess of those strong gains — above 100 percent per year in many cases.” .

Why is it that only big oil is subject to this tax? What about the dairy products we all buy? If supply dries up due to some mad cow epidemic, won’t prices and profits increase? If profits don’t rise, how will the farmers be able buy new cows to make the dairy products we need to get the prices back down by increasing the supply?

The difference with oil is that supply is difficult to increase. Even OPEC is near it’s maximum output. So who can solve the problem? How about the consumer giving up gas guzzlers? How about new technologies like hybrids? Maybe the oil companies, who need to stay in business long term, are working on the next fuel source? But won’t they need profits to pay for changing the way they do business from selling oil to selling ???? Maybe in the short term, oil companies could use ‘excess’ profits to build some new refineries to make more gasoline? So profits would be used to increase supply or just turned over to the Fed Gov to be wasted on some pork somewhere.

“The ceiling will be maintained the same and we will offer the market what Opec can produce,” said Venezuelan Energy Minister Rafael Ramirez.

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“Will the world ever physically run out of crude oil? No, but only because it will eventually become very expensive in absence of lower-cost alternatives. When will worldwide production of conventionally reservoired crude oil peak? That will in part depend on the rate of demand growth, which is subject to reduction via both technological advancements in petroleum product usage such as hybrid-powered automobiles and the substitution of new energy source technologies such as hydrogen-fed fuel cells where the hydrogen is obtained, for example, from natural gas, other hydrogen-rich organic compounds, or electrolysis of water. ”

Yes, a lot of small businesses and low income families are severely affected by the cost, but who should they be angry with?