Windfall Taxes

Last Wednesday the Senate called a group of representative executives of the oil industry to a meeting in Washington D.C. in which they were asked to justify the fact that they had made very large profits.

Even though it's been in the news a lot, I thought I'd just repeat that for the benefit of those of you who already heard about this but thought you had accidentally fallen into a Twilight Zone special in which Stalin and the pope team up to take over the world. Consider this a public service announcement; I assure you that you are still living in what is left of America, and this did actually happen.

In an interview on MSNBC Senator Ken Salazar (D-CO) accused oil executives of having "the highest profits that we've seen in history for the oil companies", contriving to make that a derogatory remark by also calling the profits "inexplicable". Scarborough echoed this sentiment by also labeling the oil prices, and subsequent profits, as inexplicable. (In related news Salazar and Scarborough are currently winning the People's Republic of America Award for invoking the vague concept of 'The People' the most times in an interview. See if you can find a more atrocious example and you'll win the vague concept of 'A Prize'!).

This opinion on the cause of profits is in line with the recent bustle about imposing a windfall profit tax on the oil companies. A windfall profit is money which one wasn't expecting, with the connotation that it was due to luck, eg. inheritance. A windfall tax is one-time direct tax on unexpectedly large profits. You see, if the profit is unexpected, inexplicable, then it isn't wrong to steal it because the oil companies didn't earn it to begin with. *wink, wink*

I haven't been able to find a reporter, a political commentator, or even an oil executive who will say it. So, I'll say it; these companies are selling a product. That means that they expend effort and/or capital to create a value and then trade it. This particular value that they create is at an extremely high demand. That is how they justify their profit, because there are a lot of people who are willing to pay what they charge for oil. And the reason they are morally entitled to all the profits is because they get the crude oil (by buying or collecting it), they refine it into gasoline, They do research in how to make it better, and they ship it to easily accessible stations for purchase. If you think I sound like the little red hen, then fantastic! That hen had a fucking point.