tag:blogger.com,1999:blog-5393996338560944889.post3912863725418545848..comments2024-03-02T02:26:00.928-05:00Comments on bleakonomy: Whose windfall?tetracontadigonhttp://www.blogger.com/profile/04604381739383227553noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5393996338560944889.post-9577223533982459132008-12-15T13:08:00.000-05:002008-12-15T13:08:00.000-05:00Dan:Sorry, you can take the guy out of the finance...Dan:<BR/><BR/>Sorry, you can take the guy out of the finance dept, but not the finance out of the guy. (Well, not without a retractor and a pathologist standing by).<BR/><BR/>EBITDA stands for "Earnings before Interest, Taxes, Depreciation and Amortization". It's just a fancy way of saying, revenue less your actual cost of good sold.<BR/><BR/>I do see your point about short term pain. I just fear the long term consequences of such solution.<BR/><BR/>Selah.Kenhttps://www.blogger.com/profile/12422204108474682868noreply@blogger.comtag:blogger.com,1999:blog-5393996338560944889.post-83586637649387198102008-12-15T09:04:00.000-05:002008-12-15T09:04:00.000-05:00Well, since you use terms like EBITDA (which is, I...Well, since you use terms like EBITDA (which is, I assume, Latin?) with authority, it seems your understanding of economics may be a wee bit greater than mine. You are not alone in either surpassing said understanding, or in opposing windfall taxes from that perspective. <BR/><BR/>I suppose my support for one is based largely on a visceral reaction, and seeing how hard-hit people in places like Maine are this year. Our state is in terrible financial shape, and is in no position to offer much help. I worry that people are going to literally freeze.Danhttps://www.blogger.com/profile/11213051268392108382noreply@blogger.comtag:blogger.com,1999:blog-5393996338560944889.post-51809524371747263502008-12-15T00:24:00.000-05:002008-12-15T00:24:00.000-05:00Dan:I think you run into troublesome waters when p...Dan:<BR/><BR/>I think you run into troublesome waters when people start advocating winfall, or any ad hoc tax. For one, what do we consider a "winfall"? Is it greater than normal margins on a per cent basis, or pure EBITDA? Is it based upon a raw number, or year over year increase? Oil margins are in line with banking, light manufaturing, and other similarly sized firms (well, up until this year), so it's a bit of an apples to oranges to call this "record earnings" a winfall.<BR/><BR/>But here is where I really see the winfall tax breakdown. If you state (codify) that we will tax at a new marginal rate a certain level of EBITDA, then the firms will either be able to shuffle accounts to increase the costs, or they will start to slow production to keep under that accelerator. Gaming the system would be too easy.<BR/><BR/>The other thing they could do would be to simply pass off the tax bill to their direct consumers (distributors) which would either pass along downstream to the end user, or if that was not possible, get out of the business (since their margins are razor thin as it is). Either way, the tax bill results in higher prices to the consumer.<BR/><BR/>Sorry to get all Ayn Rand on you, but I just can't get behind windfall taxes as a policy tool.<BR/><BR/>KenKenhttps://www.blogger.com/profile/12422204108474682868noreply@blogger.comtag:blogger.com,1999:blog-5393996338560944889.post-69748648336506838632008-12-14T19:35:00.000-05:002008-12-14T19:35:00.000-05:00In that case it would possibly be the broker, depe...In that case it would possibly be the broker, depending on how they had themselves tried to inoculate themselves against price rise, by pre-ordering. And to protect themselves many may have been caught in the same predicament. <BR/><BR/>But oil brokers in the North East had been going through a rough time, so this may have helped keep some of them in business.<BR/><BR/><A HREF="http://tonto.eia.doe.gov/oog/info/hopu/hopu.asp" REL="nofollow"> This </A> gives you some idea of what is going on. And gives, albeit a bit out of date, under the What consumers should know, a breakdown on how monies are divided.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5393996338560944889.post-35769209636125458072008-12-14T15:22:00.000-05:002008-12-14T15:22:00.000-05:00Well, yes. But who makes the money from the gap b...Well, yes. But who makes the money from the gap between what people are made to pay, and what oil currently costs? I realize that much of the home heating oil is purchased at the market price in the summer (which means that there is no huge windfall for anyone), but if people continue to pay their locked-in prices all winter, someone will make a bunch of money. Who?<BR/><BR/>And yes, this whole situation yields the morally unsound result that procastinators like yours truly are rewarded for their lack of prudence.Danhttps://www.blogger.com/profile/11213051268392108382noreply@blogger.comtag:blogger.com,1999:blog-5393996338560944889.post-8854997270848926892008-12-14T14:04:00.000-05:002008-12-14T14:04:00.000-05:00Well I did try and apologize for my error with thi...Well I did try and apologize for my error with this story <A HREF="http://www.theoildrum.com/node/4700" REL="nofollow"> On being wrong – the falling price of home heating oil in Maine </A>, and Gail has written about some of the causes <A HREF="http://www.theoildrum.com/node/4846" REL="nofollow"> here </A> . In a normal year prices reach their lowest point in the October/November time frame and then start back up. With the global drop in demand, however, this may keep prices down until the current surplus starts to be used up.Anonymousnoreply@blogger.com