Photo: Misterbisson, Creative Commons, Flickr
Senate Democrats once again tried to push through a bill to create a windfall tax on Big Oil profits. And, again, it failed. In order for a debate on the bill to even be opened, 60 votes are needed. Those votes were absent, and so the windfall tax on Big Oil profits dies another day — probably to be resurrected again in the relatively near future.
Exxon Mobil (XOM), a company that Barack Obama mentioned by name in a speech taking aim at Big Oil profits, insists that more taxes will not alleviate the problems that many American families have, due to high energy costs. MarketWatch looks at what both sides of the debate over a windfall tax on Big Oil are saying:
"Politicians always want to do something great for the people, but they forget that Exxon Mobil and other companies are not nameless entities … they employ lots of people," said North
Raising taxes won’t help lift the U.S. out of its economic slowdown, [Euler Hermes economist Daniel] North said. …
The bottom line is, energy is killing the average American family, it’s killing our economy, it’s killing our foreign policy," Sen. Chuck Schumer, D-NY, said Tuesday.
Schumer and Sen. Richard Durbin, D-Ill., are proposing $10 billion to $12 billion for immediate relief to consumers this year.
Exxon, and other Big Oil companies insist that if they are allowed more leeway for exploration and drilling, the energy crisis could be solved. However, I remain skeptical of such solutions. Taxing Big Oil into oblivion (although the companies could do without their government subsidies) isn’t the solution — even if some of that money would go to helping consumers. Companies would likely just raise prices to compensate anyway.
Instead, incentives should be offered to encourage Big Oil companies — and other energy companies — in efforts to develop alternative fuels and invest in renewable energy. Eventually we will have to move away from fossil fuels altogether, and we have reached a critical juncture. Instead of clambering for the government to do something to Big Oil, the public needs to demand that the government start looking into sustainable alternatives, and creating reasons for Big Oil, as well as other energy and technology companies, to move away from the status quo and start innovating.
Disclosure: I do not own XOM.
Site disclaimer.