Dealer Outlook

Trade Only Dealer Outlook Blog

Kicking oil around won’t help gas prices!

Occasionally I like to vent. Today is occasionally!

First, do not assume I’m trying to be political here, I’m not. Rather, just pointing out that the continued bashing of the oil companies by the Obama administration — with characterizations like “taxpayer subsidies for big oil profits” or “corporate welfare,”  seems a clear effort to mislead the public. Moreover, it will only add to the negative impacts $4/gallon gasoline is having on the economy and, most especially, the consumers’ psyche.

For the boating industry, rising gas prices represent another barrier to growth. While we’re convinced existing boaters won’t give up their sport, there’s little doubt high gas prices will: influence how much boaters use their boats; play a negative role in new boaters’ decisions to buy; and put a damper on thoughts of “moving up” for existing boaters. Clearly, what we do not need is a President stumping around the country dramatizing high gas prices and implying that taxing big oil will somehow solve something. What?

Of course, there’s little explanation ever offered about the tax-big-oil idea. But, it intentionally plants the notion that the oil industry is gouging everyone at the pump while ripping us off for big tax subsidies, too! The truth, however, is the tax referred to is the same tax credit given to virtually all companies that produce a product (like boat manufacturers, for example.) These companies get to write off 9 percent of their revenue. Moreover, oil companies don’t even get that much – they currently only get a 6 percent deduction. So much for what the administration calls a preference for big oil!

So taxpayers aren’t subsidizing big oil any more than they’re subsidizing any other manufacturer. Indeed, if you follow the money, you’ll find the oil and natural gas industry pays, on average, more than $85 million per day to the federal government for taxes, royalties and lease payments. And, according to the Petroleum Institute, the industry’s effective tax rate in 2010 was 41 percent.

There’s more. In Congress there’s also a bill that wants to require our domestic oil companies to pay taxes on the royalty taxes they must pay to foreign nations. Such double taxation would blatantly ignore the fact that our oil industry must directly compete with many foreign government-owned oil producers. Since we already have the highest corporate tax rates in the world that make competing in global markets tough for U.S. manufacturers, proposals like these should be viewed by all Americans for what they are: (1) espoused solely for some political gain; and/or (2) created by Neanderthals.

For a White House that wants to claim it’s for energy self-sufficiency, it’s a sad commentary that it spends so much effort trying to convince us doing something to hurt the oil industry will somehow make us feel better about the price at the gas dock. How stupid!

Thanks, now at least I feel better.

Comments

14 comments on “Kicking oil around won’t help gas prices!

  1. John

    The oil companies are owned primarily by the common man thru mutual funds, pension plans, etc.

    Simply type “who owns the oil companies” into a search site and look at the results.

    The terminology of “big oil” is ludicrous. Imagine the costs for oil products if economy of scale was not in play.

  2. Ed Wiser

    I very rarely read Schultz’s column but the headline on this one got me. What a load of tripe. Schultz is consistently biased and often ill-informed – like the manatee and speed issues in the Tampa bay area. he is long on opinion and short on facts and critical analysis. He says he is not trying to be political but then does exactly that. His stances are consistently anti-environmental and look for short-term gain but at the expense of long-term losses. Soundings needs to discontinue this Chamber of Commerce mouthpiece. We are able to think for ourselves.

  3. Peter Fenwood

    Norm – I pay attention to what our president has to say, and at no time have I ever gotten the impression from him that he is suggesting that removing or reducing tax breaks for oil companies would directly affect gas prices at the pump. As Obama has rightly stated, the high price of oil is primarily driven by world demand and other events and very substantially by speculation on oil futures.

    Reducing tax breaks for oil companies is a valid potential source of much needed revenue, which, in light of the record profits being made by these companies, deserves to be looked at.

    In the meantime, engaging in name calling – however obliquely done – as in you Neanderthal reference, in no way furthers ration, intelligent discussion.

    Peter Fenwood

  4. CaptAndre

    Norm,

    This is a very complex issue. I do not agree with any additional taxes on domestic oil companies. However, I also do not agree with subsidizing any commerical industry. I don’t want to pay for someone elses fuel not would I expect them to pay for mine. If someone burns more fuel per year than I do, I am in a small way, paying for that person fuel. That isn’t fair. Continuing the subsidies only makes sense if everyone in the USA consumed the same amount of fuel—never going to happen. We need to stop subsidizing any commerical enterprise. Keep the govenment out of business.

  5. John

    I think the main point of the article is that continued bashing of oil is of no benefit whatsoever.

    Mr. Fernwood – I think the fact that the term “big oil” is used by the president is enough to implicate him.

  6. Mark

    Oil is a limited resource that will continue to increase in price as demand increases.

    Gas prices will follow the price of oil. It may go up and down but the trend is only headed one way – UP !

    The oil companies are not to be blamed for making a profit. They should be held to account for funding a campaign of misinformation about the effects of fossil fuel pollution that is causing serious damage to the environment.

    The oceans are being seriously altered by fossil fuel pollution.

    See this link

    http://www.pmel.noaa.gov/co2/story/What+is+Ocean+Acidification%3F

    Studies show that fossil fuel pollution causes ocean acidification and has a dramatic effect on oysters, clams, sea urchins, corals, and calcareous plankton. When shelled organisms are at risk, the entire food web may also be at risk.

    It is very difficult to face the facts but gas prices will continue to rise. So will the damage to the oceans and atmosphere from burning fossil fuels continue to increase until we take the necessary and inevitable steps to reduce and then eliminate it.

    It is time to take action to move to clean sustainable energy. It is not going to be easy. None of the current technologies are economical or ready to do the job. But the costs of delay will only make the transition more difficult.

  7. Boater

    No subsidies and a fair tax system are what we need. Taxing one set of businesses or class of people more or less than another isn’t fair. But that’s what Obama has been pushing. He wouldn’t care about gas prices unless it was key issue with the public and might affect his chances of being re-elected.

    Oil and gas are too expensive because left-wing activists, environmentalists, socialists (see Obama) and other groups have been working for decades to make it that way. They want to make travel by car as expensive and miserable as possible, so you willinging abandon your gas-powered vehicles.

    To that end, they’ve taxed, fee’d and strangled gas and oil production and sale, building of energy and electrical plants, manufacture and sale of boats and vehicles, building and management of parking lots, freeways, gas stations, roads and other infrastructure. And they’re promoting and subsidizing their own agenda of “green lifestyles and energy.” Are you feeling miserable enough to hop on your government-approved bicycle, speed train or electric bus yet?

    Given the chance, advances in energy and transportation would begin to naturally provide more efficient, more environmentally friendly products and services at reasonable prices that the public is willing to purchase. It’s already moving in that direction. You don’t have to push and nag to make it that way.

  8. C.Moore

    35% of the price of gasoline at the pump is federal taxes.
    As the price goes up so does the amount of Revnue the gov’t takes in. so they have little motivation to actually bring the price down. If they cared about the little people they would institute a tax holiday on gasoline.
    How’s $2.60 a gallon sounld??
    The oil companies or for that matter what company is getting a 35% return on its investments? None.
    Oh yea the 35% doesn’t include the lease amount paid by companies monthly to drilling on public lands.
    Ed Wiser is obviously not in the marine industry or a boater. I would have to believe from his history of post here that he is the assigned monitor of this industry blog by the lobbist paid by the various radical agenda driven enviromental groups in this country.

  9. Jim

    Wow Norm; I wonder how all these right thinking liberals feel about farmers? Ethanol? Oh, and what was the name of the company that was not only subsidized to make energy but wholly funded by our lovely administration–and didn’t they go bankrupt despite the best efforst of the left? Yet oil subsidies are bad; hmmmm.

  10. Doug Reimel

    Oil is not just energy as many want you to believe or think. Oil is the plastic bottle you drink from. The cell phone, I-pad, computer, tires, fiberglass, rayon, dacron, and so many other products we use everyday. Many of are medical supplies are Petroleum based products. A Hybrid car cannot exist without the petroleum product that houses the battery components that make the hybrid possible. There are very few products or services we use today that are not touched by or originated by petroleum. It is not just energy.

  11. AnonymousBob

    Norm:

    As others pointed out, you definitely made a political statement with this post. I believe that was your intent in the first place, especially when you start off with, “First, do not assume I’m trying to be political here, I’m not.” I call BS on that!
    This is like someone that starts a conversation with, “Not to be rude…” But, I’m going to be rude anyway.

    Don’t insult our intelligence by claiming to write a non-political piece and then proceed to write a political opinion piece. We all know where you stand, especially regarding this administration. So, do us a favor, do yourself a favor, and treat us like adults and let us know you’re submitting a political opinion piece. Otherwise, we’ll call you out as has been done already.

    Additionally, if you’re going to spout alleged facts, at least try to find sources that are unbiased and objective. To say the Petroleum Institute is going to provide information that counters their agenda is intellectually disingenuous – and shows your bias. Reminds me of the Natural Gas industry television commercials that spout all the wonderfully glorious benefits of fracking. Do some real research and, suddenly, fracking ain’t so grand after all.

    Norm, if you really wanted to help the Marine industry, you would do well to provide the full picture of a topic. Perhaps you can do a counter post to this one that highlights why you support the oil industry receiving subsidies in light of their record breaking profits. Highlight how the petroleum lobby uses those subsidies, and money we pay at the pump, to buy off legislators to ensure those subsidies and tax benefits remain viable. Highlight how the price of oil is primarily driven by speculation and not the actual end users. Highlight how the lack of demand in the US along with increasing vehicle fuel efficiency is going to dictate high fuel prices (causes a lack of tax revenue). You know, provide some substance to a post other than your tired, copy-and-pasted rhetoric. C’mon, Norm, you can do it!

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments Policy.