Obama demands Congress end oil, gas subsidies

Discussion in 'Politics, Religion, Social Issues' started by Thomas Veil, Mar 1, 2012.

  1. Thomas Veil macrumors 68020

    Thomas Veil

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    #1
    You know, I have to say, I stand in open-mouthed awe of Mitch McConnell's ability to never be on the correct side of an issue.

    But I'm also taken aback a little by Obama's canniness. I think he's finally learning how to play this game. And I don't know, I see very little downside for him in this.

    Oh, you know and I know that if subsidies ended, the companies would just try to make up the difference by jacking up prices. But they'd do it at their peril. Any Republican or Blue Dog who defended such a thing would be in deep, deep trouble with his or her constituents.

    I mean, really -- when's the last time you heard about an oil or gas company having to face deep budget cutbacks? It's happened to nearly every other sector of the economy. Nobody would "understand" their "need" to raise prices.

    And if subsidies don't end (even though they should), Obama positions himself as a populist hero and the Republicans as debt reduction hypocrites.
     
  2. flopticalcube macrumors G4

    flopticalcube

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    #2
    Since oil companies don't control the price of oil or gas, they would have to cope some other way. Either live with less profit, close marginal production or improve efficiency.
     
  3. rdowns macrumors Penryn

    rdowns

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    #3
    The $4 billion is a drop in the bucket compared to the free security provided to their tankers by our Navy.
     
  4. mcrain macrumors 68000

    mcrain

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    #4
    If raising taxes is taking money from our pockets and giving it to someone else, and we take back money we give to the oil companies, shouldn't that result in more money in our pockets, or less money being taken from our pockets?
     
  5. Sedulous macrumors 68000

    Sedulous

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    #5
    Well if Obama were a proper Socialist as some claim, why not just nationalize the oil companies?

    Certainly they will manage to make a little less. I'd also like to see some of those large corporations with negative tax rates have to pay their fair share.
     
  6. Rodimus Prime macrumors G4

    Rodimus Prime

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    #6
    Closing marginal production will push up prices as it removes some supply from the system.
    I am for phasing out the subsidies over a span of say 5-10 years as it would not be a huge shock to the system that way. Doing it in one go would be a massive shock and the knee jerk reactions from the oil companies would be big. Plus no way in hell would anything but a phase out system have a chance to pass congress.
     
  7. Thomas Veil thread starter macrumors 68020

    Thomas Veil

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    #7
    Ya know, since we keep getting told that one of the reasons for high prices is lack of refinery capacity, if we do continue subsidies in the short term, why not make the money contingent on increasing refinery capacity?
     
  8. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #8
    Stopping freebie cash going to.already largely profitable companies? Makes too much sense, it won't pass congress.
     
  9. hulugu macrumors 68000

    hulugu

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    #9
    Sure. Change the tax incentives so that they're directed at refinery capability.

    I think you're right and I think that's the plan. Obama might have figured out how to triangulate political policy. Finally.
     
  10. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #10
    I'd rather see the money going to other projects that actually need money to turn profits while the businesses grow. Wind power has been very successful in the Midwest, how many towers can we build on these billions? I recently heard solar panels broke 34% efficiency, how many fields of those can we setup for a few billion? The oil companies are already profitable, they need no further subsidies.
     
  11. rdowns macrumors Penryn

    rdowns

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    #11

    I agree. He's killing on the stump and communicating things very clearly.


    Related:

    Barack Obama, Human





     
  12. hulugu macrumors 68000

    hulugu

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    #12
    I totally agree and I've said it for a while. The billions in subsidies should be aimed at wind projects and building solar systems like Agua Caliente, a 290MW project in Yuma County or Solana's Abengoa Solar project west of Gila Bend.

    The second is waiting for federal loan guarantees, which could easily be covered by oil subsidies.

    My earlier point was that if we *have* to give oil companies subsidies, it should be in the aim of lowering costs and developing new jobs, which new refinery capability would do.

    But, I say they've had a nice run, but it's time for solar, wind and tidal to get decades of benefits and guarantees.
     
  13. flopticalcube macrumors G4

    flopticalcube

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    #13
    If all the companies receiving subsidies removed all the marginal production it probably would have some affect on prices. It is difficult to say how much. It certainly would drive some of the smaller companies to the wall. I don't think it will pass either. A phased out system would be better.

    ----------

    You would have to approve new refineries. Most of ExxonMobil's profit is in refining, not oil production.
     
  14. steve knight macrumors 68020

    steve knight

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    #14
    I thought exxon never pays taxes did they not get a huge refund?
     
  15. flopticalcube macrumors G4

    flopticalcube

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    #15
    Over the past 5 years they have paid an effective tax rate of 30% on US income. Most of their income (75%) is overseas.
     
  16. iJohnHenry macrumors P6

    iJohnHenry

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    #16
    I would pay $100 to the charity of your choice, just to see that happen in my life-time. :D
     
  17. kavika411 macrumors 6502a

    kavika411

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    #17
    I applaud Obama for this.

    One less thing for which to tax.
     
  18. Happybunny macrumors 68000

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    #18
    This coming election is going to be about the economy. this is a great move on Obama's part, the oil companies will be forced into a corner.:D
     
  19. MacNut, Mar 2, 2012
    Last edited: Mar 2, 2012

    MacNut macrumors Core

    MacNut

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    #19
    Has Obama yet talked about stopping the commodity trading on oil?
     
  20. zioxide macrumors 603

    zioxide

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    #20
    Obama is obviously right on this. An industry that is making tens of billions of dollars in yearly profit off the American people does not deserve a four billion dollar tax break. That's bull ****.

    ****ing republicans come out and say that big oil shouldn't have to pay more taxes? So ridiculous. These people couldn't be more disconnected with the real world. Big business has the republicans in their pocket and they are screwing over the general population of this country. When will the people wake the **** up and realize this?
     
  21. thewitt macrumors 68020

    thewitt

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    #21
    No one is saying oil companies should not pay taxes.

    The subsidies are only in place to support domestic development, something Obama does not support, therefor he wants to kill it.

    It's just more class warfare and fear mongering from the left's standard playbook - though it works since most Americans are ignorant of how things actually work.
     
  22. MorphingDragon macrumors 603

    MorphingDragon

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    #22
    Domestic Development?

    Thats a fever dream in America, and its far from Obama's fault.
     
  23. guzhogi macrumors 68030

    guzhogi

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    #23
    Honest question: are these subsidies actually being used and how? If they get used to improve efficiency or safety, good. I'm all for that.

    However, if the companies use the subsidies just to pad their pockets to get higher profits so their stock price rises, quit the subsidies.

    If we get rid of the subsidies, that means the government could lower taxes or spend the money on more military or something (both things Republicans seem to want).
     
  24. imahawki macrumors 6502a

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    #24
    Obama needs to free up money to give to failing "green" companies run by his donors.
     
  25. Dont Hurt Me macrumors 603

    Dont Hurt Me

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    #25
    The taxpayer has been raped by all kinds of subsidies, Big Oil is just one of the many screw jobs. Big Oil is making more money then ever and we still hand them our tax dollars? ridiculous. Obama is right. Take these away and if they have to throw away our money give it to green and home grown energy solar,electric and natural gas.
     

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