Does everybody feel better now? said Andrew Cassel in The Philadelphia Inquirer. Last week, the CEOs of five major oil companies were dragged before a Senate panel, where they were 'œtongue-lashed, told the public was fed up with high gasoline prices, and threatened with windfall-profits taxes. And that was from Republicans.' Nobody thinks the GOP-led Congress will actually enact such a tax, or that it will do anything to increase supply or reduce demand. This was classic 'œpolitical theater,' said the Chicago Tribune in an editorial, staged to make it appear that Congress shared America's indignation. Oil companies hauled in a record $25 billion in profits during the third quarter, as gas prices surged to new heights. 'œMembers of Congress are of a mind that somebody's going to get roasted for high energy prices, and it won't be them.'
It shouldn't be the oil industry, either, said Jeff Jacoby in The Boston Globe. The companies are making huge profits right now, but the oil industry actually earns less on the dollar than many other industries—about 7.7 percent. The U.S. corporate average is 7.9 percent, and pharmaceutical companies (with a profit margin of 18.6 percent), banks (19.6 percent), and several other industries do far better than Big Oil. People also forget that bringing gasoline to the pumps requires billions in high-risk investments, including exploration, new offshore drilling platforms, and other expensive technology. Sometimes, the companies' gambles pay off; sometimes they don't. And win or lose, they pay three times more taxes than they make in profits: $2.2 trillion in state and federal taxes over the past 25 years.
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