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There is no such thing as price gouging by private oil companies

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By Alex Epstein:



There is no such thing as price gouging by private oil companies.



The term "price gouging" implies that oil companies and gas stations have an ability to forcibly inflict harm on us--but they do not. Any price we pay for a gallon of gasoline, we pay voluntarily, based on its value to us. If we think gasoline is too expensive, we are free to drive less, to buy more fuel-efficient cars, to use carpools or busses, or to travel by bicycle or on foot. Gas station owners cannot force us to buy gasoline; they can only offer us a trade, which we are free to accept or reject.



Since the prevailing price of gasoline is the result of trade, it reflects not the arbitrary "greed" of gas station owners, but the facts of the market: the producers' costs, competition, and what customers are willing to pay.



Oil company "greed" is not "hurting the nation"--it is making oil and gasoline available to all of us who are willing to pay market prices. We should be grateful for that.



Alex Epstein
Ayn Rand Institute



[Ed. Note: To quote Brian Summers: "Too bad homeowners don't post their property taxes, and the prices of their homes, the same way that gasoline retailers post their prices."]



http://ObjectivismOnline.com/blog/archives/000815.html
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Not only do we not “have to” have gasoline, but the demand for gasoline is very elastic since we can just how much to drive and what kind of car to buy.

The argument is doubly idiotic since high profits is what attracts more competition to an industry in the first place. Income taxes only lead to higher average pretax profits, since the lower margins insure that only the most profitable companies can survive.

Bill O’Reilly is a fascist communist and the fact conservatives haven't disowned him is just another indication how corrupted they have become. </rant>

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Dont oil companies receive pretty hefty subsidies from the government? (I'm asking this seriously, I was under the impression that they did, although I dont know for sure). If so, then accusations of price gouging may have some merit (again, I dont really know enough about the politics here to say).

Edited by Hal
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I don't think so, but the amount of "profit" that the government makes in taxes on the gas sold is double the profit the oil companies make per gallon. How come there is no public outcry about "tax gouging"... seriously?

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Yay..... I'm watching Fox News and a guy from the "Cato Institute" (yeah I know ;) ) just shot down all the price- gouging BS. Now, we just need stuff like this played on others stations and during primetime news instead of 12:30 at night.

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http://archive.greenpeace.org/pressrelease...e/1998jun9.html

According to greenpeace(not a good source I know) they were funded to the tune of $12 billion, with a B, a year in 1995. Also the 5 big companies(exxon,connocco,etc) seem to have a de facto government backed oligopoly. There hasn't been a new refinery built in 20 years because government regulation makes it nearly impossible. I think government sucks and am inclined to think "poor busines men" but it would seem that with their profits reaching new records every year they are not suffering under unfair government regulation so much as enjoying unearned wealth by virtue of government protectionism. I love capitalism and free markets, but a ceo who allows his company to take huge government subsidies isnt a hank rearden, he's a jim taggert and I have no stomach for hero worship of men like that.

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Did you click on the link to the report within that report? You'll see that the biggest "subsidy" is government defence of the oil industry. Even the strategic oil-reserve is classified as a subsidy.

Secondly, all these anti-business folk classify a "tax-break" as a "subsidy". For instance, the government might say that oil equipment may be depreciated over (say) 4 years instead of the real (say) 6 year expected life. This accelerated depreciation will mean lower taxes in the first 4 years. This will be classified as a "subsidy" (about $200 million, according to the report).

Up to now, I did not have a firm opinion on the facts. However, if this is all they could come up with, I have to assume that the oil-industry is not getting any substantial subsidy.

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Did you click on the link to the report within that report? You'll see that the biggest "subsidy" is government defence of the oil industry. Even the strategic oil-reserve is classified as a subsidy.

Secondly, all these anti-business folk classify a "tax-break" as a "subsidy". For instance, the government might say that oil equipment may be depreciated over (say) 4 years instead of the real (say) 6 year expected life. This accelerated depreciation will mean lower taxes in the first 4 years. This will be classified as a "subsidy" (about $200 million, according to the report).

Up to now, I did not have a firm opinion on the facts. However, if this is all they could come up with, I have to assume that the oil-industry is not getting any substantial subsidy.

No, I didn't. Sorry about that. It was late and I didn't feel up for any thourough research. Now I am a little more impressed by them. They managed to reduce their taxable income from $204 Bil to $30 Bil from 1977-95. While I am a bit envious I can't morally fault them for that. I would love to learn how to do that.

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You need to convince a few congressmen that roofing is essential enough to require a tax-break. :)

The "capital" outlay neccessary to "convince" them would probably be prohibitive. Plus, I would need to illiminate all but 4 other roofing companies in the country to make it worthwhile. That would be great....I could easily afford the higher gas prices once I can charge $1,000,000/roof. Only the very wealthy will be able to afford them. Muwhahahah....

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