Hugo Chavez's Very Excellent Windfall Oil Profit Tax
Hugo Chavez is not a friend of ours, but he does come up with some good ideas. As reported in the Wall Street Journal ("Venezuela Passes New Oil Tax," 04.16.08), on Tuesday, at his direction, Venezuela's National Assembly passed an oil windfall profits tax that will be assessed against all of Venezuela's oil producers ranging from the state oil firm Petroleos de Venezuela and extending to its foreign partners such as BP, Chevron, Total, etc.
The tax is levied when the price of benchmark Brent crude rises above $70/barrel. The state will take 50% of the difference between this level and the monthly average of the final sales price above the $70 level. As the price exceeds $100, the government's participation rises to 60%.
Before you have Adam Smith turning over in his grave, consider the following. Were the price of oil a true reflection of market forces your point would be well taken. But patently, it is not. It is a manipulated price, the result of collusion of the OPEC cartel as Venezuela knows well, being one of OPEC's most hawkish members. There are further strong indications (Congress, when are you going to investigate this seriously?) that the price of oil is being pushed ever higher by targeted trading in the commodity pits. And now with the rise of sovereign wealth funds, the one-way direction of oil price trading becomes even more suspect (please see "Oil at $111 a Barrel. We Are Being 'Sovereignly Screwed," 03.17.08)
In any case, we are dealing with a commodity that has left all ballast of free market determination far behind. The results are profits for oil companies that are so egregious that they surpass all definition of "windfall profits." If monopoly collusion is viewed by our laws as illegal, then the monopoly/cartel induced oil prices we are currently experiencing and paying for at the pump are in effect crooked profits and it is time our government acts to redress this injustice visited on all of us, and finally begins to level the playing field.
How ironic, in our ongoing saga with the oil barons, that we need Hugo to show us the way.
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Hugo Chavez is not a friend of Bush and his policies. Hugo is a bit of a monster himself, but on this tax thing, he is absolutely correct.
However, on the tax thing, the United States receives the smallest portion of any oil producing country from its' oil companies in the way of payment for the natural resources they extract, which really belong to the entire country. I would support a tax of over fifty percent on every barrel of oil extracted from the ground of the United States over the $70 a barrel price and severely punish and criminalize any attempt by the oil industry to delay pumping it to get around it.
Then, we should charge Saudi Arabia, Kuwait, the UAE and IRAN for protecting the Strait of Hormuz. We spend over $100 million dollars a day protecting it and they charge us $115 a barrel for the oil. In the end, however, this is a criminal conspiracy on the part of the oil companies, traders and the oil producers and we need to put a good many of them in jail and seize the proceeds of their profits from the traders, the companies, and anyone we can reach.
The single act of releasing not less than 20% and not more than 50% would force competition in this market for the first time in seven years. Everything you touch is directly impacted by the price of energy, EVERYTHING!
In the morning this president could reverse the direction of this unbridled greed. He has assisted in the greatest shift of assets from the tables of the multitudes to the blood soaked hands of the Oil/weapons Barons that direct his every action. This president should immediately order the release of 20% (140,000,000 barrels) of crude from the S.P.R. and sell it to the domestic refiners at $45.00 per barrel for diesel and gasoline production to be sold in the U.S. market only. The S.P.R. is at historic levels and the Nation is in a crisis. If more crude is needed to break this market stranglehold, than release as much as 50%. Thats 350,000,000 barrels folks and please don't give me the response that the S.P.R. is only 30-45 days of inventory. That asinine assumption would mean not one drop of crude would be available to U.S. markets other than the S.P.R. for 45 days including the crude we produce domestically. Do not believe for a second that Oil would be shut off because the producers would not sell at $45.00 per barrel. The producers are in the business of producing and selling Oil, period. Let them drown in their crude for a few months and teach them about competitive markets.
READ "CONFESSIONS OF AN ECONOMIC HITMAN"!!!!!
See how your government has been doing business in your name!
See how the World Bank offers loans to countries they can never repay excpet by giving away control of their natural resources to American Companies.
Learn how the C I A agents, who work for the World Bank ,offer bribes to the Government Offiicals or a BULLET TO THE HEAD if they refuse the World Bank Loan.
Learn how Halibourton Brown and Root do all the work with out any accounting ripping off the money from the loans . Building mostly roads to the natural resources so they can be removed easy.
What a scam!
Why would Hugo Chavez trust the U.S.?
My only argument with your assertation is that I can't call these companies "American" anymore. They have become states of their own.
One small additional but all important piece of the equation.
The U.S. Executive branch and a large portion of the Congress is a wholly owned subsidiary of these Corps. Look up the definition of a Fascist State.
Hugo Chavez might not be a friend of you, however this is your own personal animosity.
He's been doing his best to get hostages out of the FARC's hands (which would have worked better if your buddy in Columbia hadn't screwed it).
I assume the french haven't been friends of yours neither since 2002 and 2003 when they adviced you NOT to go in Iraq.
While Blair was your friend. He helped you great in Basra !
Sometimes you might want to listen to your ennemies, dude. It might worked better for you and the majority of your compatriots.
"Hugo Chavez is not a friend of ours"
Hugo Chavez is not a friend of George W. Bush and neither am I. Hugo Chavez is not a friend of ExxonMobile and neither am I. Hugo Chavez, unlike George W. Bush, does what is best for his Country. Hugo Chavez, unlike George W. Bush, uses the wealth of his Country to enrich the many not the few. Hugo Chavez is a Venezuelan Patriot, George W. Bush is an American traitor.
I AGREE !!!!!
Mr. Learsy, You have mis-spoken.
Hugo Chavez is doing what our own government should have done centuries ago. He is placing a high dollar value on their countries natural resoueces and not allowing them to be stolen thru bribery and extortion.
How many countries has the World Bank SEDUCED with loans and bribes to government officals?
In "CONFESSION OF AN ECONOMIC HITMAN" the EXCIA agent says his work for the world bank was to offer governmentr officals 2 options.
The Government officals are offered TONS OF MONEY or A BULLET IN THE HEAD. Now that is how they did business in South and Central America. Your government doing business in your name!!!!
Loan they could never repay but the World Bank would gladly controling interest in any natural resources as repayment.
So the poor country has modren roads that are mainly use to remove their natural resources and modern ports for the same reason.
Millions and billion made from the oil and gas while the citizens of that country starve on less than $1.00 a day. Government officials with Swiss Bank Accounts.
The best thing to do now is learn from the way Big Oil does business. As a carpenter I will now be charging $5000.00 per hour. See that wasn't so bad.
Let me know how that works for you.
"Here should be an objective of government itself, to provide at least as much assistance to the little fellow as it is now giving to the large banks and corporations" Hugo Chaves? NO; That quote is from FDR. We've come a long way since then...in the wrong direction!
Did somebody say "futures"?
Did somebody say "futures derivatives"?
Are they "hedging" on "futures"?
Now I'm not saying that the oil companies THEMSELVES are, or are not, actively involved in betting the price of oil up, and, somehow I'm sure that they are not betting the price down.
But, we are dealing with uneconomic factors, i.e. the price is not related to supply and demand factors.
Then how is the price being determined, and who is determining the price?
The reason I ask is this.
The so-called "free-market" system is anything but.
Resources are no longer priced by a free market.
Were it a free market, the price might be around $40.
Maybe less.
But, we have allowed there to exist another type of market.
The free market to screw you.
It is a financial market that trades in rights to resources.
It is that financial market that is successfully betting against all of we ordinary people, and constantly and consistently creating the right "confidence" in these markets so that the price of oil, or anything else, should be higher.
We should abolish the oil futures market and for all commodities.
We should abolish all futures markets.
We should abolish all financial instruments that trade on future conditions.
They contribute NOTHING to the real economy.
They make really rich folks into really, really rich folks.
Now, let's talk about agriculture.
Hope that's not too un-american for HUFFPO.
OH POOR POOR OIL BARONS!
DID ONE OF THE CITIZEN IN A COUNTRY WHERE YOU WERE STEALING THIER OIL AND ONLY PAYING PENNIES BUT REAPING MILLIONS STOP YOU????
ALL THE POOR PEOPLE YOU HAVE BEEN DEFRAUDING FOR AO MANY YEARS TO GET THEIR NATURAL RESOURCES FOR YOUR PROFIT.
I wish the USA has a tax like that to make sure the Citizens were paid well for their EQUITY in the natural resources taken and used by business. The U.S. Treasury should be full of money from access fees and relugation fees.
"Hugo Chavez is not a friend of ours"
Speak for yourself! last time I remember he sent subsidized oil to people in the US. NO ONE in the US government has done anything close to what Chavez did for the low income and poor people in Venezuela. He rescued the country from the corporate rapists which I find admirable.
Is he prefect? No but he sure is a more of a human being than the garbage sitting in the White House.
"Hugo Chavez is not a friend of ours" Raymond Learsy
That's your opinion dude, I don't recall ever giveing you permission to speak for me. I consider him a friend. He's one of the best leader's in the world as far as I can tell. He's not responsible for the price of oil. Our leader's have made our bed for us here, so now we have to sleep in them.
What you see happening in this country [US} is the result of stupid corupt and criminal leadership.
You and Sean Penn can cuddle up with him them.
http://en.wikipedia.org/wiki/Criticism_of_Hugo_Ch%C3%A1vez
Wiki, yeah base you life around that.
Hugo is doing good things for his people, is our prez? You ranswer will speak volumes.
Looks like the C I A has someone wrtitng for the link you posted.
Maybe you think the poor in Venezuela should go hungery so you can drive and S U V and EXXON can add more profit!!!
OPEC is not the only cartel involved in oil.
{ "There are further strong indications (Congress, when are you going to investigate this seriously?) that the price of oil is being pushed ever higher by targeted trading in the commodity pits".}
Jesus Christ !
When are people going to learn that Congress isn't going to do jack sh#t about the oil companies.
Every time there is a significant increase in oil they bring in the Oil exec's and put up this
big - " were gonna get to the bottom of this" - charade but nothing changes!
Do you really think Obama or Clinton { no need to mention McCain for obvious reason's} are going to march in and demand lower oil prices - and actually make a differance?! Naaa - I don't think so.
As has been said over and over, this country and Government have bought and paid for a long time ago.
Will the goverment also pay the oil companie if/when the oil falls bellow $40?
No.
No? Oh my. We are already in hell....
BTW, Hugo was right on another point.
Chavez said the land should be used to feed people, not to fill "rich people's cars."
http://marketplace.publicradio.org/display/web/2007/04/06/chavez_gets_biofuel_backlash/
Will oil ever see $40 again ?
Typical whiney neocon statement.
I mean, that was classic, hell bent, I'm right you're wrong, I deserve this because I'm God and what I say goes, neo-con, big business oil- corporate logic.
Thanks for gracing us with your wisdom. Oil should be at $40 a barrell.
When new leadership does come in, if Obama isn't assasinated by these goons, Or even McCain, when they realize that this man might NOT go along, and look the other way while they manipulate oil and all energy markets like Bush & Cheney did, Our economy will feel a huge pressure taken off, and deflated of much of its ugliness like no one has any idea.
They think they have it sown up, but I remember when Clinton took office, Federal Courts actually relaxed a death grip on many issues... The very week, or, very close to that time, when Bill Clinton was inaugurated, The Feds left Willie Nelson's ranch and studio on the Pedernales that they had confiscated. Willie was given a new deal and the means to make an arrangement to pay the IRS back, which of course, he did. GH Bush hated Willie, and he has a mean streak few really saw.
His son seems to have a mean streak too, mix that with the stupidity he's demonstrated, and you have the full force of calamity our country's dealing with now.
This NeoCon may be Proud but he sure as hell isn't informed.
Corporate welfare bums always get paid. It's the neocon way.
15 Billion dollars for the airline industry in 2001 with nothing for the workers.
Billions for Chrysler in the early 1980's, nothing for the workers.
30 Billion for Bear Stearns in a package of 200 Billion for our crooked financial institutions, and nothing for the victims of their mortgage schemes.
Don't worry dimwit, if your precious oil companies ever got into trouble, the government would be very quick to bail them out with taxpayer dollars.
I'm betting you are too dumb to earn much of an income, so it doesn't concern you.
$ 2.9 TRILLION AND MORE TO COME TO BAIL OUT ALL THE GAMBLERS, I MEAN INVESTORS.
I HEARD ALL LOSSES IN VAGAS WILL SOON BE REPAID.
EVEN BETS ON LOSING HORSE WILL BE REFUNDED.
GO ON GAMBLE THE FEDERAL RESERVE HAS YOUR BACK!!!!!!!!
Sure, Next question?
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