Nations should impose special taxes on oil firms: UN Secretary General

[Die_empty]

source

Due to the Russian invasion of Ukraine oil price skyrocketed triggering inflation and high cost of goods and services. But this unfortunate condition is favoring the oil and gas companies. While households are grappling with higher energy bills, companies are reaping the benefits.This quarter four of the biggest energy firms - Exxon, Chevron, Shell and TotalEnergies - earned nearly $51bn almost doubling what they earned last year.

Recently, UN Secretary General Antonio Guterres has called on nations to impose special taxes on oil and gas companies because of this excessive profits and use the funds to support the poorest and most vulnerable people  through these difficult times.

The British and Italian government have imposed these special taxes but the US and French government is rejection this move stating that it might still lead to increase in domestic energy cost and might scare investors away from the industry.


https://www.bbc.com/news/business-62415904

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[Darker45]

Actually, this is also true in other industries, not just the oil industry. I've been seeing local news headlines of how the businesses in the retail industry, banking industry, energy, and others are registering higher net profits every quarter and every year.

It makes me wonder; there's the pandemic, there's the invasion in Ukraine, there's the rising national debt, there's the rising unemployment rate, rising of the prices of goods and services, rising inflation rate, and so on and so forth and yet the business sector are making more and more money.

The ordinary people are tightening their belts, now more than ever, because everything comes with a higher price now. And yet businesses are unaffected, declaring double digit growth in profit. Why? Because all else are passed on to the consumers. Business people don't compromise their profit.

[Mr.right85]

The question here is,

Would it really help?

Imposing taxes on these firms doesn't mean they still won't have to take it off the masses. I don't think they wnt go about paying whatever taxes that is imposed on them but the issue here is, it would lead to an increase in price for the various oil products they offer and in the end, the citizens would still be the once to suffer.
It doesn't make any much difference. I think nations that have got oil should look towards a more local production of these resources, get there refineries working and the livelihood of its citizens would be improved.

[davis196]

The big problem is that the oil corporations might simply increase the prices even more, which defeats the purpose of such "special taxes".
There are only two ways to lower the fuel prices- increase the supply and decrease the demand.
The first way depends on the OPEC countries in the Persian gulf(and maybe Russia). They have no incentive to increase the oil production and lower the prices.
The second way depends on the global economy. If a massive global recession is coming, the global demand for oil and gas will decrease, which will eventually lead to lowering the oil and gas prices.
Imposing "special taxes" won't solve the problem, but the politicians around the world like this "tax the rich" approach, when the crisis strikes.

[Lucius]

Imposing "special taxes" won't solve the problem, but the politicians around the world like this "tax the rich" approach, when the crisis strikes.

This is the strategy that goes in the direction of showing the common people that they (politicians) were elected by the people in the elections, actually on the side of the common man. History tells us that this was never true, and that the rich have a very large influence on politicians.

If a massive global recession is coming, the global demand for oil and gas will decrease, which will eventually lead to lowering the oil and gas prices.

Perhaps the new wave of the pandemic in the fall will again cause closures, because the number of infected people has increased by about 300 000 on a daily basis compared to last year. The good news is that the number of dead has decreased significantly compared to the same period last year. Empty roads would certainly affect the price of fuel, but on the other hand, all those people at their homes would use more gas or electricity than they normally do.

[WeedGoW]

Yeah, tax the rich I mean the oil firms and see how they will just increase the price to cover back their loss in tax. After the covid pandemic, I have a strong distrust for all of the UN officials because most of them still keep their seats at the UN but doing a shitshow of it. How about we fire them, reduce the UN contribution then use that money to subsidize fuel/oil prices till Russia and Ukraine war sort out? At best, maybe 6 months from now on till Russia is out of their tanks, supplies, and conscripts. What do you guys think? I think it sounds better than increasing tax on the oil firms.

[avikz]

Recently, UN Secretary General Antonio Guterres has called on nations to impose special taxes on oil and gas companies because of this excessive profits and use the funds to support the poorest and most vulnerable people  through these difficult times.

Noble thought! It will help governments earn some extra money out of this crisis. But a government needs to understand that these oil companies are mass employers. They must not start firing people to make provisions for this extra tax. Then the result will be negative on economy which is already struggling with high inflation.

Also third world countries can misappropriate such taxes which may not reach to the target mass and can go into the political funding.

[Gyfts]

It's a blatant lie that the increased energy prices are caused by corporate greed. The energy companies operate on specific margins that are independent of what the raw materials for the goods they produce are sold at. No matter what the cost of the raw materials, the profit margin on relative terms will stay the same. It seems as if the UN doesn't understand supply and demand, nor recognize the tight energy constrains that were artificially placed on countries who decided it was prudent to ditch oil/gas for greener and less efficient forms of energy.

They got what they asked for. I suppose it's easier to demonize the big oil/gas corporations instead of pointing out that the revitalization of energy in Europe away from fossil fuels, and the dependence on foreign sources, got them in the mess they're in.

[palle11]

I understand that to tax is to reduce the earning strength of who is in concern so that there is lesser money circulating to avoid increase inflation but if the UN secretary Antonio guteres is making this statement, it doesn't make any much meaning because these companies also have budget for social responsibilities which also goes back to their host countries.

[Findingnemo]

Sudden change in the tax policy simply because few companies managed to earn more than their previous year is fair? And do you think increasing the tax for the four companies will be benefitable for the other people who is in need? If that much fund needed in reality then why not reduce the fund allocation for their defense an give a small percentage to the people who is in need!

[teosanru]

source

Due to the Russian invasion of Ukraine oil price skyrocketed triggering inflation and high cost of goods and services. But this unfortunate condition is favoring the oil and gas companies. While households are grappling with higher energy bills, companies are reaping the benefits.This quarter four of the biggest energy firms - Exxon, Chevron, Shell and TotalEnergies - earned nearly $51bn almost doubling what they earned last year.

Recently, UN Secretary General Antonio Guterres has called on nations to impose special taxes on oil and gas companies because of this excessive profits and use the funds to support the poorest and most vulnerable people  through these difficult times.

The British and Italian government have imposed these special taxes but the US and French government is rejection this move stating that it might still lead to increase in domestic energy cost and might scare investors away from the industry.


https://www.bbc.com/news/business-62415904

It's quite ironic to put taxes on these people because these companies aren't going to pay the taxes themselves they will eventually shift the burden of tax to the customers which will ultimately increase the overall price of the oil and increase inflation even more. So I don't think it's a very wise decision to do so. Unless you can bring a law that they can't even pass the effect of this on the consumers.

[pooya87]

The ordinary people are tightening their belts, now more than ever, because everything comes with a higher price now. And yet businesses are unaffected, declaring double digit growth in profit. Why? Because all else are passed on to the consumers. Business people don't compromise their profit.

That's one of the damages capitalism has done to the world. The minority who own all the money also control everything else including the law and regulations. Which is why in countries with the worst case of capitalism they also pay the least amount of taxes, sometimes even 0 taxes!
These special taxes are also not going to fix anything partly because Guterres is talking for himself lol but also because worse case scenario for these big companies is increasing prices to cover that tax.

[hugeblack]

Imposing taxes on these companies will result in additional costs over the price of oil, because in most cases, countries will charge that cost to individuals and will not pay it, and therefore oil bills will increase for the individual even if they obtain government support.
The best solution is to rationalize consumption as much as possible and support global stability, as there are areas in Libya and Venezuela that are rich in oil, but political problems are what make supplies stop.

As for the natural gas problem, it is a separate and complex crisis.

[Hydrogen]

Fossil fuels are usually heavily subsidized by the state.



Image link:  https://i.ibb.co/crNVFJ5/oil-subsidies.jpg

https://subsidizinggreen.blogspot.com/2011/12/history-of-subsidies-in-united-states.html

Rather than raise taxes. In the united states, it would make more sense to simply cut subsidies.

Giving free handouts to oil companies in the form of subsidies while simultaneously raising taxes on oil. Increases inefficiency.

People don't care about this that much. They think it doesn't affect them. But one day they will wake up and realize it does greatly affect them and their standard of living. And hopefully they will take this issue more seriously then.

[PaulBf1]

You're basically advocating for punishing oil companies by imposing new taxes on them just because they turned more profit ? how is this even legal.

Going by your logic (or UN's logic for that matter), US should also tax apple,amazon or google if they happen to make more profit this year right ? 

[edgycorner]

How about imposing such tax on conglomerates in all industries that would rather utilize their profit in creating a monopolistic landscape instead of paying their employees(read AMAZON).

Anyhow, carbon tax is a better alternative than such "grotesque tax" scheme. At least it will force companies to be environment conscious  

[Darker45]

The ordinary people are tightening their belts, now more than ever, because everything comes with a higher price now. And yet businesses are unaffected, declaring double digit growth in profit. Why? Because all else are passed on to the consumers. Business people don't compromise their profit.

That's one of the damages capitalism has done to the world. The minority who own all the money also control everything else including the law and regulations. Which is why in countries with the worst case of capitalism they also pay the least amount of taxes, sometimes even 0 taxes!
These special taxes are also not going to fix anything partly because Guterres is talking for himself lol but also because worse case scenario for these big companies is increasing prices to cover that tax.

There's so much we can hate about capitalism, yes; but I wonder, which alternative, which truly works in reality, is better? The system which precedes capitalism like mercantilism was definitely not as free. Or should we opt for socialism? Or, is the idea of free market realistic, and could actually be translated into real day-to-day commerce?

Anyway, I agree with you that this special tax is not going to address anything. If at all, it will only further burden the consuming public. After all, as I've said, everything will only be passed on to them. You impose more tax responsibilities on them, they will simply increase prices and things will continue running smoothly from their end.

[Webetcoins]

I understand that to tax is to reduce the earning strength of who is in concern so that there is lesser money circulating to avoid increase inflation but if the UN secretary Antonio guteres is making this statement, it doesn't make any much meaning because these companies also have budget for social responsibilities which also goes back to their host countries.

You are right that tax will reduce their income because they are earning too much. This is what they say the rich only get richer while the poor can become poorer but in order to stop that from happening, those countries who haven't imposed a tax yet in oil should do it so that the money that people spend in oil can also be returned to them later on. I think this won't make the circulation of money lesser but the money can circulate more if let say the government can redistribute the tax in the form of cash assistance.

but if the UN secretary Antonio guteres is making this statement, it doesn't make any much meaning because these companies also have budget for social responsibilities which also goes back to their host countries.

They have their own budget but it does not mean that other countries will only depend on them or other countries won't do the same thing. It just feels not right.

[pooya87]

There's so much we can hate about capitalism, yes; but I wonder, which alternative, which truly works in reality, is better? The system which precedes capitalism like mercantilism was definitely not as free. Or should we opt for socialism? Or, is the idea of free market realistic, and could actually be translated into real day-to-day commerce?

That's the million dollar question, and I'm afraid there may not be any correct answer to that because I believe any route we take will get corrupted eventually and people will find a way to exploit it. Of course it is easier to exploit some systems than others. Maybe the solution should be sought in a better and independent lawmakers and regulatory body that is not easily corrupted to redefine the laws that favor those with "power".

The problem isn't only in economics, take democracy for example. It is good on paper but in practice it is the worst thing that has happened to humanity, since we place the fate of a nation in the hands of millions of uneducated people who vote with their emotions for the candidate that has fooled them better than the rest (ie. exploited the system).

[virasisog]

The question here is,

Would it really help?

Imposing taxes on these firms doesn't mean they still won't have to take it off the masses. I don't think they wnt go about paying whatever taxes that is imposed on them but the issue here is, it would lead to an increase in price for the various oil products they offer and in the end, the citizens would still be the once to suffer.
It doesn't make any much difference. I think nations that have got oil should look towards more local production of these resources, get their refineries working and the livelihood of their citizens would be improved.

I certainly agree with it. Only ordinary people would suffer from it because the prices of our daily necessities would increase either. It will make our situation worst. The inflation crisis has been hitting us hard and if they will tax oil, it will only drag us suffer more than what we could bear. Most of us are just grinding each day to survive and this plan will surely hit poor people.