Posted by
voice_of_reason on Thursday, June 10, 2010 8:29:15 AM
Has anyone considered that the Govt derives considerable revenues from every gallon of gas sold? Govt also taxes the profits of companies, including oil companies that engage in off-shore drilling.
Clearly, this does not let BP off-the-hook for any mistakes made on its offshore platform.
However, it provides aggrieved Gulf Coast residents an interesting rationale to name the Govt as an un-indicted co-profiteer! In fact, this liability could be used as an additional justification to eventually stop the double-taxation of corporate profits.
Here are the ways in which Govt 'profits' from Oil Companies - totalling roughly THREE TIMES the Oil Co profits:
* federal, state and local taxes on gasoline sales
* royalty payments - to explore 'Govt land' for oil
* state and federal corporate income taxes
So, yes, BP should be held accountable for their mistakes - and should pay their share of the cleanup. But, it is unseemly for politicians, who represent the Govt, to attack BP for being a profit-seeking company (which they certainly are). But, at least BP makes their money by locating and then extracting that sludgy stuff from all over the world, refining it and providing it conveniently at gas stations.
What does the Govt do to earn its share of the profits?
If we lived in a free-market, it would be logical to support an unlimited liability for BP in class action lawsuits resulting from the spill. In a mixed economy, with gigantic tax-supported Govt bureaucracies and regulated, taxed private business ... Govt is also on the hook.
Those who like to make this all about evil, profit-seeking oil companies should consider the following:
1) Oil drilling is a risky (but rewarding) process.
2) Environmental restrictions (that may be well-intentioned) can have the effect of making it more risky
3) Govt regulation provides a false sense of security. It is not a panacea, because
- it relies on the whims of unaccountable bureaucrats
- it can be corrupted by those who are being regulated - with both sides culpable