According to Repukes, the "windfall profits tax" is a political stunt ...

[zbdent]

but making a tax holiday on the $.18 per gallon (long surpassed by the prices after McCain first proposed it ...) on gas is "sound policy" ...

(Remember, it was John McCain, not Hillary Clinton, who proposed it first ...)

[Skink]

1. Wouldn't want he oil companies to chip in for thier war.

[zbdent]

2. Don't forget ... it would essentially be rescinding the massive tax breaks

they got right before they announced historically record profits ... in 2005 ...

[crazymans economics]

3. Of course it is...

The real issue is unregulated oil speculation going on in the commodities market. There were over 10 million crude oil contracts purchased in Jan. 2008 and NONE delivered. That means it was a gigantic paper shuffle and gambling game.

If Congress had the guts to take the gambling out of the commodities markets and take away the oil companies' ability to purchase crude oil contracts, oil prices would stabilize.

[SergeyDovlatov]

4. So, if they overestimated the oil price, they will lose a lot of money on their speculations

Speculators (unless they are dumb, or politically connected to get bailout) transfer the risk of price volatility from producers / consumers onto themselves.

It is indeed a gambling game. However, if speculation is profitable, it serves a dumpening effect on the price of the commodity.

Winning speculators buy low and sell high. This can be translated as they buy when there is a glut and prices are depressed and sell when there is a shortage.

Right now the speculation is against the dollar. Speculators perceive that US printed too much and digging itself even deeper by getting ready to attack Iran. Thus dollar denominated oil prices climb up.

If you price oil in czech crown, for example, the price did not rise much at all.

[TexasBushwhacker]

6. Could it be just a bunch of "round-trip" trades

ala Enron?

[Name removed]

5. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Karl_Bonner_1982]

7. The tax holiday will be sucked up as profits...

because the demand for gas is relatively inelastic. Oil companies will be able to hold the price and pocket most of that $.18.