A Senate committee Wednesday announced an investigation into taxes paid by major oil companies and asked the Internal Revenue Service for the companies' tax returns.
The Senate Finance Committee promised "a comprehensive review of the federal taxes paid" by the oil companies on their record profits last year.
Sen. Charles Grassley, R-Iowa, the committee's chairman, said the panel was concerned about high profits and executive compensation at oil companies.
"I want to make sure the oil companies aren't taking a speed pass by the tax man," said Grassley in a statement.
With gasoline prices soaring and oil companies announcing record profits, "it's relevant to know what the real financial picture is for this industry," Montana Sen. Max Baucus, the ranking Democrat on the committee, said.
I'm no fan of the IRS, but the point of having that agency is to de-politicize the tax collecting process. If we let Senators get into the business of overseeing individual or corporate tax records then we're but a step away from politicians using the power of government and tax laws to target their political opponents.
It's laughable hearing about excess profits. Oil companies have to be successful in order to continue to provide oil, something we all need. The more money they make, the more successful they are. The idea that they only need to be successful enough to deliver the oil without offending us too much is downright nonsense. Oil price is a component of supply and demand. The U.S. government has through its policies limited the supply of gasoline through environmental legislation and we're all paying the price at the pumps for that alone.
If we must dig into the records, I'd like to see a clear breakdown of how many gallons of gasoline Exxon sold last year and how much money they made on each gallon versus how much local, state and federal governments made on each gallon. Here in Orlando the total tax bill for a gallon of gas is over 39 cents. If Senators are going to blame someone for the high price of gasoline, it would only be fair to breakdown the government's own culpability.
An economist should have no trouble figuring out the real cost of gas if the supply were unfettered by legislation, the environment were not a factor and taxes on the end result were nil. That's the number we should be looking at and then deciding whether the government intrusion is worth the final price.
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