Windfall profit truths Barack Obama doesn't want you to know

Barack Obama has been proposing windfall profit taxes on the "evil big oil companies" over the past few days to his mobs of dumb masses he's been speaking to at campaign rallies. These mobs who cheer him have no idea what it means other than I'm going to get a free handout if government taxes them. Have you ever done anything for yourselves? Do you consider yourself part of the real working class who works for themselves and their family or part of the working class that the Democrats love, the ones who earn just enough to where they still qualify for all of the government assistance programs (welfare, food stamps, government housing, etc). These people can't understand basic economics and will believe anything that comes out of the politician's mouth if it involves getting a handout. For example, when Obama says the government will take the profits of the big oil companies through a windfall profit tax and give every American working family $1,000.00, you can hear the cheers at his rallies. A handout for doing absolutely nothing. You get $1,000 from the "evil big oil companies" who would show that money as a profit on their books. That will feel great, right?

If you think that is a great idea, I feel really sorry for you and recognize you probably aren't that intelligent or don't have much control over your finances. I'll give you a quick lesson. Oil companies are publicly held corporations with many shareholders. That means any ordinary person can buy a share of the company and can have a voice in board elections and business decisions that will affect their investment. When you own one or more of these shares of the company, you can possibly get a dividend on that share or shares that you own. Dividends can be paid quarterly, semi-annually, or annually. You can choose to take the dividend as cash or reinvest it through buying more shares of the company. Many Americans have their investments in stocks and mutual funds and rely on dividends for their retirement or as extra income. Companies who make a profit decide on whether they want to keep the profit as retained earnings or pay out as dividends. Most companies retain a portion of the earnings and pay out the rest as dividends to its shareholders. So, if a publicly held company makes a big profit one quarter, it's likely the shareholders will be rewarded with a large dividend. Sounds like a great deal for the company and for everyone investing in the company for retirement, right?

So let's go over this scenario now. Oil companies are reporting a huge before tax profit. To any shareholder, this is music to their ears. But, to the Democrats, this is a chance to vilify the oil industry as greedy and opportunity to propose a windfall profits tax as their answer to high gas prices. The Democratic core constituent cheers this because this means the government gets more money and there's more opportunity for free handouts. But what does this mean to all of us that rely on our investments for our retirement? I sure as hell won't get social security when I retire because of the government using our social security funds for out of control pork spending. Guess what? By taxing the windfall profits of the oil companies, shareholders of the companies are going to lose those dividends and every American will see the prices at the pumps stay the same or rise if the supply and demand stays where it is now because the companies pass the tax onto the consumer.

This is classic redistribution of wealth by the government. What ever happened to free market success and capitalism? Do you know what the socialist state of Venezuela does? They take the profits from businesses through taxes or take over the business and they become state controlled. And what do they do with the taxed money? They distribute it to the people. It's socialism and it's the type of policy Barack Obama wants to enforce. This my friend is your Democratic Party and what they don't want you to know. This really good article also makes an argument against windfall profits.