Sean King

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Knoxville, Tennessee, United States

Saturday, July 26, 2008

Who Owns the Oil Companies?

As giant oil companies like Exxon Mobil and ConocoPhillips get set to report what will probably be another round of eye-popping quarterly profits, just where is all that money going?

The companies insist they're trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.

It's good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel.
[emphasis addes]

Yep, oil stock are among the most widely held, meaning that millions of individual investors, whether they know it or not, benefit significantly from their increased profits. You'd think that this is a good thing, right? I mean, rather than hoarding all these profits, oil companies are actually DISTRIBUTING them to owners--you, me, our mutual funds, our 401(k)'s and our pensions. Sure, we have higher fuel prices, but at least we indirectly recoup some of the higher cost by having profits paid to our retirement plans, right?

Well, not the way the Dems see it. Dems like Chuck Schumer would have us believe that they'd prefer these profits be used to search for more oil (even though they refuse to open up for domestic drilling areas with KNOWN reserves). And, in Schumer's warped mind, the fact that these oil companies are instead LOWERING our net fuel cost by actually DISTRIBUTING their profits means that we should slap them with a windfall profits tax:

Sen. Charles Schumer, D-N.Y., said the fervor for stock buybacks is a clear sign Big Oil isn't interested in new production or alternative energy. "When you hear that," he said, "it screams out for a windfall profits tax."

As if "companies" ever actually pay taxes anyway.

As if taxes ever make things cheaper.

As if he wouldn't be calling for a "windfall profits tax" if only these companies were hoarding their profits rather than distributing them to us.

Is Schumer really so stupid as to belive that companies (rather than owners) pay taxes, that taxes make things cheaper, or that we'd all be better off if oil companies hoarded their profits?

No, but he thinks YOU are.

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