Obama's 'emergency' economic plan (Full Version)

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inthysite -> Obama's 'emergency' economic plan (8/2/2008 12:17:45 AM)

Several threads have briefly discussed NObama's "windfall profits tax" on the oil companies.

Other threads have talked about NObama's socialists or Marxists leanings.

Since both of these are related I thought I would start a new thread to discuss these topics.

Here is what NObama has recently stated, and I'll quote from both Conservative and Liberal media.

Obama Pledges Imposing "Oil Windfall Profits Tax" -- Right Message, Wrong Language
Democratic presidential candidate Barack Obama sought to tap into Americans' anxiety over high gasoline prices by pledging to seek a windfall profits tax on U.S. oil companies if elected.
"I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," the Illinois senator said on Monday according to Reuters.

Obama's 'emergency' economic plan
Sen. Barack Obama (D-Ill.) on Friday announced an “Emergency Economic Plan” that would give families a stimulus check of $1,000 each, funded in part by what his presidential campaign calls “windfall profits from Big Oil.”

The first part of Obama’s plan is an emergency energy rebate ($500 to individual workers, $1,000 to families) as soon as this fall.

“This rebate will be enough to offset the increased cost of gas for a working family over the next four months,” Obama said. “Or, if you live in a state where it gets very cold in the winter, it will be enough to cover the entire increase in your heating bills. Or you could use the rebate for any of your other bills or even to pay down debt"

There are a couple of immediate problems that I see with this.

1.This is income redistribution plain and simple. Take from the rich, give to the poor. Sort of like Robin Hood.
FYI: Here is the definition of Socialism:

Webster's Revised Unabridged Dictionary
Socialism
So"cial*ism\, n. [Cf. F. socialisme.] A theory or system of social reform which contemplates a complete reconstruction of society, with a more just and equitable distribution of property and labor.

Now I know this isn't a complete reconstruction of society but it is a step in that direction, aiming for a more just and equitable distribution of property and labor.

2.NObama does not define, as far as I can tell, exactly what would be considered a windfall profit. How much money does a company have to make before it is considered a windfall profit?

3.This apparently isn't just a short term "solution" but rather a permanent tax policy. Oh and note his terminology, "Forcing big oil"
Forcing big oil companies to take a reasonable share of their record breaking windfall
profits and use it to help struggling families with direct relief worth $500 for an
individual and $1,000 for a married couple. The relief would be delivered as quickly as
possible to help families cope with the rising price of gasoline, food and other necessities.
The rebates would be fully paid for with five years of a windfall profits tax on record oil
company profits. This relief would be a down payment on Obama’s long-term plan to
provide middle-class families with at least $1000 per year in permanent tax relief.

4.Won't this just drive the oil companies out of the US to avoid this tax?



Leon_Figg3 -> RE: Obama's 'emergency' economic plan (8/2/2008 12:43:13 AM)

I must admit I have not heard of Obama's plan, but a couple of questions immediately come to mind.

1. How does he plan on define "windfall profit" and prove, in court, that the oil companies are experiencing "windfall" profit?

2. How is this plan going to help us become energy independent, in any way, so that working families may truely be helped?

3. Where, in this economic downturn, is he going to get the money to give every working family $1,000.00 until he is able to define and prove the oil companies are experiencing "windfall" profits?



colliefan -> RE: Obama's 'emergency' economic plan (8/2/2008 3:05:46 PM)

Doesn't the Candy Man understand what the oil companies have already paid in taxes? That the costs of the taxes will be passed on to the consumer? And if the government makes it difficulr to do business in the USA, they can take their business elsewhere?



inthysite -> RE: Obama's 'emergency' economic plan (8/2/2008 4:05:59 PM)

I guess people feel that I'm either immature, childish or using hate to spread lies using words like socialism or Marxism. However you want to look at it I think it's funny (not really) to try and hide this in a so called tax.

NObama is very clear on what this is:

Forcing big oil companies to take a reasonable share of their record breaking windfall profits and use it to help struggling families with direct relief worth $500 for anindividual and $1,000 for a married couple.

Note the wording here, forcing and reasonable share. First off, what is a reasonable share? Secondly, forcing - well that just sounds like stealing, or robbery. Do you hear him using this same wording when talking about his other tax increases? Does he say that he will force you to pay your reasonable share if you have capital gains for example?

Of course not because the tax payers wouldn't stand for it. But if it has to do with big bad oil, then all is fair. I guess we should change the saying to all is fair in love, war, and hating big oil.

My other question is where does this end. What happens if some other company becomes the target? What if the government decides that Microsoft is making an obscene amount, or Wal-Mart?

If you allow NObama to do this you open wide a door that we will never be able to close.



iluvatar -> RE: Obama's 'emergency' economic plan (8/2/2008 6:22:02 PM)

quote:

ORIGINAL: inthysite

Do you hear him using this same wording when talking about his other tax increases? Does he say that he will force you to pay your reasonable share if you have capital gains for example?


Plenty of people have talked about the rich paying "their fair share."

On a related note - why are capital gains taxed differently from regular income? It seems to me that a quick, easy way to get around the whole "tax cuts for the rich" business would be to lump capital gains in with regular AGI. Most middle and lower-income people don't derive a significant portion of their annual income from capital gains, so it won't affect them (much). Meanwhile, it'll get the overly wealthy to pay rates in line with everybody else. And it means more $$$ for the treasury.

-Dan.



inthysite -> RE: Obama's 'emergency' economic plan (8/2/2008 6:54:17 PM)

quote:

Plenty of people have talked about the rich paying "their fair share."


This is exactly what I'm talking about. Look at the words you used for the rich vs. the words used for big oil.

The rich should pay "their fair share"; this makes it sound as if they aren't paying as much as everyone else, thus making it seem good to tax them more.

Which falls in line with your other statement:
quote:

Meanwhile, it'll get the overly wealthy to pay rates in line with everybody else. And it means more $$$ for the treasury.


But how do you think it would go over it NObama were to use the same terminology that he did for the oil companies?

"It's high time we forced the rich to pay a reasonable amount of their excessive wealth so that we can distribute it to the poor to help them pay their bills"

I doubt very much that this would sit well with the public.

Note: If you look at the actual records you will see where the rich pay more than their fare share and just because they can afford to pay more doesn't mean they should.

Again, we are getting back to socialism here. When we allow the government to over tax the wealthy (whether it be business or individual) and then redistribute that to the not so wealthy you are discouraging the free market and the individuals will to achieve.

Why should I work harder than John Doe. He sits around all day collecting his government money, while I work my butt off only to have it taken away.



inthysite -> RE: Obama's 'emergency' economic plan (8/2/2008 7:16:33 PM)

Another question that just came to mind that I don't have an answer to since I am by no means a legal expert but maybe someone here may have some insight to.

Is is possible that a federal windfall profits tax would violate the equal protection clause in the 14th amendment.

Since this tax would be imposed only on the oil companies that are making "excessive" profits it seems that this would apply since oil companies that aren't making as much wouldn't be affected.

Just a thought for discussion.



blessedinnyc -> RE: Obama's 'emergency' economic plan (8/2/2008 8:39:01 PM)

All I can say is that I'm happy my biggest oil investments involve either royalty trusts or European oil companies.

quote:

Is is possible that a federal windfall profits tax would violate the equal protection clause in the 14th amendment.

Actually, we had a windfall profits tax back in the '70s. It didn't work, and in 1981, Reagan got a Democratic H.O.R. to repeal it. So it is constitutional, but we've tried this experiment before.

A great compromise right now would be for Bush to push for a windfall profits tax "small experiment". Try a two-year windfall profits tax- just on the state of California- and see what happens.

Finally, I would add that a profit redistribution would only really work if we were a net exporter of oil. As production is now, a 33% tax on Big Oil would only mean a 10% savings at the pump for Joe Consumer.



iluvatar -> RE: Obama's 'emergency' economic plan (8/2/2008 10:29:02 PM)

quote:

ORIGINAL: inthysite
"It's high time we forced the rich to pay a reasonable amount of their excessive wealth so that we can distribute it to the poor to help them pay their bills"


I agree, his language was harsh. And I don't necessarily agree with a windfall profits tax. Profit margin, not net profits, is a better indicator of whether a company is gouging the public.

quote:


Note: If you look at the actual records you will see where the rich pay more than their fare share and just because they can afford to pay more doesn't mean they should.


Yes, I've seen all the stats about the top 0.0001 percent of the population paying 5x10^28 percent of the taxes, but you know what they say about statistics...

A good percentage of the very wealthy earn most of their money through capital gains rather than paycheck income like you and me. Capital gains are taxed at a lower rate than regular income. Why?

There's also an argument to be made that the very wealthy, through their various business interests, actually benefit more per person from government services (roads, tax credits, subsidies, etc) than do average folks. That's why a progressive tax system isn't as unfair as some would like to paint it.

-Dan.



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