Reasonable Profits Board, your comments please, from both sides of the aisle are welcome.

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    Jan 20, 2012 7:26 PM GMT
    'Reasonable Profits Board' To Regulate Oil Company Profit

    Six House Democrats, led by Rep. Dennis Kucinich (D-Ohio), want to set up a "Reasonable Profits Board" to control gas profits.

    The Democrats, worried about higher gas prices, want to set up a board that would apply a "windfall profit tax" as high as 100 percent on the sale of oil and gas, according to their legislation. The bill provides no specific guidance for how the board would determine what constitutes a reasonable profit.




    http://thehill.com/blogs/floor-action/house/205085-dems-propose-reasonable-profits-board-to-regulate-oil-company-profits



    Personally, we feel this is a rather slippery slope, and not a really great idea.


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    Jan 20, 2012 7:33 PM GMT
    I would prefer if they eliminated the 'speculators' and commodity 'market' manipulation from the equation first. It is a slippery slope.

    Just PURE supply and demand.icon_wink.gif
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    Jan 20, 2012 7:43 PM GMT
    Thanks TropicalMark, we think that the ability for a company, in this case the oil companies, to make enormous profits is just fine and dandy. There are plenty of loopholes that need plugging instead, rather than decreeing how much profit any company can make without being penalized for being successful.


    There is one glaring error in the article, it states "The Democrats, worried about higher gas prices, want to set up a board that would apply a "windfall profit tax" as high as 100 percent on the sale of oil and gas, according to their legislation."

    Six Democrats do NOT make up the entire group of Democrats in office.




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    Jan 20, 2012 7:49 PM GMT
    meninlove said Thanks TropicalMark, we think that the ability for a company, in this case the oil companies, to make enormous profits is just fine and dandy. There are plenty of loopholes that need plugging instead, rather than decreeing how much profit any company can make without being penalized for being successful.


    There is one glaring error in the article, it states "The Democrats, worried about higher gas prices, want to set up a board that would apply a "windfall profit tax" as high as 100 percent on the sale of oil and gas, according to their legislation."

    Six Democrats do NOT make up the entire group of Democrats in office.




    True.. The 'rising' price of gasoline has had many different excuses from the industry itself.
    Its either 'speculators' or 'not enough refining capacity' or 'oil shortages'.
    regardless of these lame excuses, the ONLY time gasoline prices drop is when everyone quits buying it! And that works EVERYTIME to include when the lame excuse that 'rising oil prices' is being used.
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    Jan 20, 2012 7:55 PM GMT


    Remember the natural gas fiasco? The Bush gov't did a good job at going after them. In that case, they were stopping production in order to artificially drive up demand and prices.





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    Jan 20, 2012 7:58 PM GMT
    meninlove said

    Remember the natural gas fiasco? The Bush gov't did a good job at going after them. In that case, they were stopping production in order to artificially drive up demand and prices.





    Therein lies most of the problem.. now how to get 'capitalists' to be honest is another story. This new thing(reasonable profits board) they want isnt gonna do that.
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    Jan 20, 2012 8:06 PM GMT
    This is a wonderful idea...for the USSR.

    We don't regulate profit in America. We regulate to make sure that in pursuit of profit no corporation infringes American citzens' rights of justice and liberty or destabilizes domestic tranquility and the general welfare.

    Kucinich has jumped the shark and needs to retire. This is disgraceful.
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    Jan 20, 2012 8:06 PM GMT
    TropicalMark said
    meninlove said

    Remember the natural gas fiasco? The Bush gov't did a good job at going after them. In that case, they were stopping production in order to artificially drive up demand and prices.





    Therein lies most of the problem.. now how to get 'capitalists' to be honest is another story. This new thing(reasonable profits board) they want isnt gonna do that.



    No kidding; all it will do is send business out of the country.

    We watched the Bush government investigative panel live on TV. They were very very good. It was something else. The execs squirmed, caught red handed.

    It's proof that both political sides have their good points.

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    Jan 20, 2012 8:07 PM GMT
    TrojanAthlete saidThis is a wonderful idea...for the USSR.

    We don't regulate profit in America. We regulate to make sure no corporation infringes American citzens' rights of justice and liberty or destabilizes domestic tranquility and the general welfare.

    Kucinich has jumped the shark and needs to retire. This is disgraceful.



    Agreed. As well, up here in what some US people claim is a socialist country, we have no such thing.
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    Jan 20, 2012 8:10 PM GMT
    TrojanAthlete saidThis is a wonderful idea...for the USSR.

    We don't regulate profit in America. We regulate to make sure that in pursuit of profit no corporation infringes American citzens' rights of justice and liberty or destabilizes domestic tranquility and the general welfare.

    Kucinich has jumped the shark and needs to retire. This is disgraceful.
    Kucinich has been a nutcase since day one! Just the opposite of Cantor!
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    Jan 20, 2012 10:14 PM GMT
    TropicalMark said
    TrojanAthlete saidThis is a wonderful idea...for the USSR.

    We don't regulate profit in America. We regulate to make sure that in pursuit of profit no corporation infringes American citzens' rights of justice and liberty or destabilizes domestic tranquility and the general welfare.

    Kucinich has jumped the shark and needs to retire. This is disgraceful.
    Kucinich has been a nutcase since day one! Just the opposite of Cantor!


    To think I ever even considered giving this man my primary vote. 'Reasonable Profits Board'??? WTF? Is this Orwell's 1984?
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    Jan 20, 2012 10:48 PM GMT
    The integrated oil and gas industry average profit margin is 6.2%, which puts it at #114 out of the top 215 industries rated according to profit margin. These are hardly the greedy oil barons they are made out to be.

    Using Congressional logic (sorry, I see what I did there), several industries are far more evil than oil and gas. These evil industries include publishing (51.7%), lumber (17.7%), railroads (15%), toys and games (10.1%) and waste management (7%).

    Determining what is reasonable and acceptable profits for random industries which may be politically unpopular at any given time is not a legitimate role of government. It has nothing to do with party affiliation, as both parties are guilty of statist intervention in our lives, which is the same thing as taking away ever more individual liberty.

    http://seekingalpha.com/article/269679-oil-industry-profit-margin-ranks-fairly-low-there-are-bigger-fish

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    Jan 20, 2012 10:50 PM GMT
    meninlove said
    TrojanAthlete saidThis is a wonderful idea...for the USSR.

    We don't regulate profit in America. We regulate to make sure no corporation infringes American citzens' rights of justice and liberty or destabilizes domestic tranquility and the general welfare.

    Kucinich has jumped the shark and needs to retire. This is disgraceful.



    Agreed. As well, up here in what some US people claim is a socialist country, we have no such thing.


    Actually, some profits are regulated in America so there is precedence. For instance:

    http://www.psc.state.fl.us/
    "The Florida Public Service Commission is committed to making sure that Florida's consumers receive some of their most essential services — electric, natural gas, telephone, water, and wastewater — in a safe, affordable, and reliable manner. In doing so, the PSC exercises regulatory authority over utilities in one or more of three key areas: rate base/economic regulation; competitive market oversight; and monitoring of safety, reliability, and service[/i]"

    I'm not advocating it at this time but I could see justification for regulating gas and food as utilities.

    See also http://en.wikipedia.org/wiki/Food_and_Fuel_Control_Act
    Its official name was "An Act to Provide Further for the National Security and Defense by Encouraging the Production, Conserving the Supply, and Controlling the Distribution of Food Products and Fuel" and became law on August 10, 1917. It banned the production of "distilled spirits" from any produce that was used for food
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    Jan 20, 2012 11:39 PM GMT
    TropicalMark saidI would prefer if they eliminated the 'speculators' and commodity 'market' manipulation from the equation first. It is a slippery slope.

    Just PURE supply and demand.icon_wink.gif




    I'm with you on this, from what I've read this problem of speculation can increase costs artificially up to 30 to 40% and we the commoners pay the bill for someones greed.


    I have a basic trust in Kucinich but like Meninlove say, its a slippery slope, we'd have to do a lot more learning about what they are proposing.
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    Jan 20, 2012 11:50 PM GMT
    This socialist's perspective :

    The idea is goofily well intentioned but errs in considering excessive profit as the disease instead of the symptom.

    You do not regulate a disease, you treat the symptom to eradicate "excess."

    Address the inequities that produce what is perceived to be excessive .

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    Jan 21, 2012 12:00 AM GMT
    I would be content if they would just sell the gas in the US rather than export it. Let them earn their "reasonable" profits here.

    http://www.usatoday.com/money/industries/energy/story/2011-12-31/united-states-export/52298812/1Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel than any other single export, according to U.S. Census data going back to 1990. It will also be the first year in more than 60 that America has been a net exporter of these fuels.
    ...
    There's at least one domestic downside to America's growing role as a fuel exporter. Experts say the trend helps explain why U.S. motorists are paying more for gasoline. The more fuel that's sent overseas, the less of a supply cushion there is at home.

    Gasoline supplies are being exported to the highest bidder, says Tom Kloza, chief oil analyst at Oil Price Information Service. "It's a world market," he says.

    Refining companies won't say how much they make by selling fuel overseas. But analysts say those sales are likely generating higher profits per gallon than they would have generated in the U.S. Otherwise, they wouldn't occur.

    The value of U.S. fuel exports has grown steadily over the past decade, coinciding with rising oil prices and increased demand around the globe.
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    Jan 21, 2012 5:42 AM GMT
    theantijock said
    meninlove said
    TrojanAthlete saidThis is a wonderful idea...for the USSR.

    We don't regulate profit in America. We regulate to make sure no corporation infringes American citzens' rights of justice and liberty or destabilizes domestic tranquility and the general welfare.

    Kucinich has jumped the shark and needs to retire. This is disgraceful.



    Agreed. As well, up here in what some US people claim is a socialist country, we have no such thing.


    Actually, some profits are regulated in America so there is precedence. For instance:

    http://www.psc.state.fl.us/
    "The Florida Public Service Commission is committed to making sure that Florida's consumers receive some of their most essential services — electric, natural gas, telephone, water, and wastewater — in a safe, affordable, and reliable manner. In doing so, the PSC exercises regulatory authority over utilities in one or more of three key areas: rate base/economic regulation; competitive market oversight; and monitoring of safety, reliability, and service[/i]"

    I'm not advocating it at this time but I could see justification for regulating gas and food as utilities.

    See also http://en.wikipedia.org/wiki/Food_and_Fuel_Control_Act
    Its official name was "An Act to Provide Further for the National Security and Defense by Encouraging the Production, Conserving the Supply, and Controlling the Distribution of Food Products and Fuel" and became law on August 10, 1917. It banned the production of "distilled spirits" from any produce that was used for food


    This is a really good point, I think. Regulation of price increases, for example, is a lot different than punitive taxation. The gov't benefits with cash infusions from such punitive taxes, and as all gov'ts go, will end up relying on them, so I see a conflict of interest.
    I think a limitation on a price increase (regulation) has no special interest taking money, except relief from sticker shock for the consumer trying to buy a necessity, not a luxury.

    -Doug

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    Jan 21, 2012 3:59 PM GMT
    meninlove said
    theantijock said
    meninlove said
    TrojanAthlete saidThis is a wonderful idea...for the USSR.

    We don't regulate profit in America. We regulate to make sure no corporation infringes American citzens' rights of justice and liberty or destabilizes domestic tranquility and the general welfare.

    Kucinich has jumped the shark and needs to retire. This is disgraceful.



    Agreed. As well, up here in what some US people claim is a socialist country, we have no such thing.


    Actually, some profits are regulated in America so there is precedence. For instance:

    http://www.psc.state.fl.us/
    "The Florida Public Service Commission is committed to making sure that Florida's consumers receive some of their most essential services — electric, natural gas, telephone, water, and wastewater — in a safe, affordable, and reliable manner. In doing so, the PSC exercises regulatory authority over utilities in one or more of three key areas: rate base/economic regulation; competitive market oversight; and monitoring of safety, reliability, and service[/i]"

    I'm not advocating it at this time but I could see justification for regulating gas and food as utilities.

    See also http://en.wikipedia.org/wiki/Food_and_Fuel_Control_Act
    Its official name was "An Act to Provide Further for the National Security and Defense by Encouraging the Production, Conserving the Supply, and Controlling the Distribution of Food Products and Fuel" and became law on August 10, 1917. It banned the production of "distilled spirits" from any produce that was used for food


    This is a really good point, I think. Regulation of price increases, for example, is a lot different than punitive taxation. The gov't benefits with cash infusions from such punitive taxes, and as all gov'ts go, will end up relying on them, so I see a conflict of interest.
    I think a limitation on a price increase (regulation) has no special interest taking money, except relief from sticker shock for the consumer trying to buy a necessity, not a luxury.

    -Doug



    Not only could oil be seen as a utility, but the windfall profit tax could be seen as payback for the American taxpayer's military expenditures and the American blood which opens up and assures continued access to crude and for protecting shipping lanes for both crude & refined products, without which the corporations wouldn't have windfall profits.

    That's one of my biggest beefs with people who think they don't owe society any percent of their profit. Idiots who think they did this all on their own. Who think they don't have to pay for the infrastructure including the protection which makes possible the environment which allows for those profits. They didn't do this on their own. Generations of other people's blood did this for them.

    The conflict of interest you mention can be seen somewhat mitigated because government has to keep its public working if it is to continue to collect taxes. For some cities to keep employees, some have rent controls. For people to be able to eat, the government might set farm product prices, etc.

    The American and other governments regulate profits in a myriad of ways, through taxation as your OP suggests, through rate & price controls, even through rezoning properties which favor one person over another, through placement of railroads and highways, eminent domain, community redevelopment efforts, govt sponsored R&D which might benefit one industry over another, etc, all of that regulating profits.

    But outside of a possible permit fee, they don't so much regulate the profits from garage sales, the last bastion of free enterprise.
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    Jan 21, 2012 4:09 PM GMT
    Well what do you know, Mr Liar has entered the topic.

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    Jan 21, 2012 4:11 PM GMT
    Hey theantijock, if oil is indeed a necessity then regulations can apply for price increases but not punitive taxation for making profits. The two things, I think, ar far different.

    If the military funding becomes dependent on punitive taxation on profits, what will happen when the company in question does not make a huge profit?

    Up here, for example, the various gov'ts are completely addicted to taxes on tobacco. This causes a huge conflict, because the gov't also want you to quit.
    At last count punitive taxes on tobacco amounted to 7 billion annually. Just imagine where the gov't would make up for that if everyone quit.
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    Jan 21, 2012 4:42 PM GMT
    southbeach1500 said
    theantijock saidThat's one of my biggest beefs with people who think they don't owe society any percent of their profit. Idiots who think they did this all on their own. Who think they don't have to pay for the infrastructure including the protection which makes possible the environment which allows for those profits. They didn't do this on their own. Generations of other people's blood did this for them.


    Thank you, Elizabeth Warren.


    Didn't have her in mind. It is a thought I've held for many years and have yet to find refuting evidence. But thanx, I actually like her. Though you really shouldn't refer to me in drag. I'd make for one ugly woman.

    southbeach1500 said
    theantijock said ...government has to keep its public working ...


    You don't even realize it, but this reveals a rather disturbing way in which you view the relationship of government and "the governed."


    What is disturbing to you about recognizing government's role in maintaining a society such that citizens have opportunity to work? What do you think I don't realize, oh, enlightened one?

    southbeach1500 said

    theantijock saidFor some cities to keep employees, some have rent controls. For people to be able to eat, the government might set farm product prices, etc.


    Would that not be a form of "controlling the means of production?"


    As I mentioned, there are various avenues of regulating profit, from preproduction through taxation of end use, even beyond, to inheritance of the gains of someone else's efforts. My point was to show that right here in America profits are regulated.

    southbeach1500 said

    theantijock saidThe American and other governments regulate profits in a myriad of ways, through taxation as your OP suggests, through rate & price controls, even through rezoning properties which favor one person over another, through placement of railroads and highways, eminent domain, community redevelopment efforts, govt sponsored R&D which might benefit one industry over another, etc, all of that regulating profits.


    Yep, all of which are an overreach on the part of government.


    Remember you said that the next time someone wants to build a smoke stack adjacent to your beachfront balcony.

    southbeach1500 said

    theantijock saidBut outside of a possible permit fee, they don't so much regulate the profits from garage sales, the last bastion of free enterprise.


    Yes, for now.... But now that school cupcake sales are regulated by the Federal government, it would only seem natural that garage sales will soon be targeted, under the guise of the "Commerce Clause."



    So barter.
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    Jan 21, 2012 4:48 PM GMT
    The question assumes too much. Let's step back and ask the more important question.

    How is this even the House's business?

    The problem with asking the question about "what counts as fair" is that it assumes that the House has some authority - legal and/or moral - to even speculate about that. It doesn't. And it shouldn't. Because granting Congress the moral authority to decide "what counts as fair" for oil companies is basically a golden ticket for them to decide what counts as fair for any industry they want to demagogue out of popular favor.
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    Jan 21, 2012 4:51 PM GMT
    meninlove said Hey theantijock, if oil is indeed a necessity then regulations can apply for price increases but not punitive taxation for making profits. The two things, I think, ar far different.

    If the military funding becomes dependent on punitive taxation on profits, what will happen when the company in question does not make a huge profit?

    Up here, for example, the various gov'ts are completely addicted to taxes on tobacco. This causes a huge conflict, because the gov't also want you to quit.
    At last count punitive taxes on tobacco amounted to 7 billion annually. Just imagine where the gov't would make up for that if everyone quit.


    Always a dilemma, part of what makes living dynamic, to weigh and balance things based upon differing values.

    When the oil megaconglomerates fail to make windfall profits they can be taxed on a sliding scale just as some professional services are charged to people of lower income.
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    Jan 21, 2012 4:55 PM GMT

    "When the oil megaconglomerates fail to make windfall profits they can be taxed on a sliding scale just as some professional services are charged to people of lower income."


    Interesting point; we have a couple of friends that are Psychologists and they charge rates commensurate on a means test of the client, but again that's price controls, not punitive taxation.
  • JP85257

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    Jan 21, 2012 5:38 PM GMT
    TropicalMark saidI would prefer if they eliminated the 'speculators' and commodity 'market' manipulation from the equation first. It is a slippery slope.

    Just PURE supply and demand.icon_wink.gif

    I can totally accept this.