Of Life and Oil Taxes

As everyone knows Congress called into town 5 members of big oil the other day in a desperate attempt to gain votes prior to the upcoming general election. This hearing makes sense only if the US was the only country on Earth with any interest in oil -- we're not. But other than stating the same arguement that the oil companies (including my own) re-iterated during the hearing I'll offer my own.

As it stands now a majority of oil profits are not from domestic sales (by a long shot they come from overseas). Unlike the auto industry, the oil industry is bringing in foreign money to circulate into the American economy. Now, that being said, in order to meet the growing demand for oil worldwide there will be an escalating need to invest further in all areas of oil exploration, refining, and pipeline applications. All companies measure the success of their investment in terms of ROCE (Return on Capital Emlpoyed, this can also appear as several other acronyms meaning about the same thing). As it stands today, $1 employed in the US does not return the same value to the shareholder as $1 invested overseas. This is not to say that there is no profit to be had, this just means that there is no real motivation for any oil company to invest in the US (notice the lack of refineries being built in the US right now). What's there to invest in? Taxing large oil companies beyond the usual 41% will do more to hurt Americans than it ever will to help. Now, I understand the altruistic cause of alternative energy. We need to have, as a society, a path forward for our ever-increasing need for energy. By doing it through taxes and government action, the only thing we guarentee is that $0.13 cents on the dollar will actually make it there.