Originally Posted by
waflyboy
There have been a number of posts suggesting heavy taxation of oil companies. I seems to me that such action may result in an increase of oil prices.
As taxes increase, the profit incentive decreases. As the percentage of revenue ending up in producer's pockets decreases, so does the profit incentive. Production then begins to decline as investors seek to deploy their capital more effectively. Supplies tighten further without a change in demand and..... you can guess the rest.
What do you think?
I think profit incentive NEVER decrease when oil companies are concerned. Your theory has a lot of assumptions which by the way has been suggested and proven to be not true. Kind a like the trickle down theory. The production level of oil is not determined by how the oil companies are taxed. The OPEC countries determine that, and who knows what formula they use. I am certainly not privy to that information, nor are you for that matter. The number of posts suggested here recommend taxation along with price regulation at the same time. Many have also admitted that that will never happen when the administration and the Congress are in bed with the oil companies and the consumers are brainwashed into thinking like you do.