Transcript: The Real Profiteers

This is a partial transcript from "Your World with Neil Cavuto," November 17, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: All right, well, if you think oil companies are getting rich from high gas prices and the like, you may be surprised who is really raking it in. Try Uncle Sam.

Since 1977, federal and state governments have collected about $1.3 trillion in gasoline taxes. That's more than double what the oil industry netted in that time. So, is the pot calling the kettle black?

Let's ask Steve Forbes. Steve is the president and the CEO of Forbes. He's also author of "The Flat Tax Revolution."

Steve, now, we vilify the oil companies, but they have given lots of money to the government.

STEVE FORBES, PRESIDENT & CEO, FORBES INC.: They do.

And that $1.3 trillion, Neil, doesn't even count what they have paid in profits taxes. The major oils will be paying billions and billions of dollars this year. So, you add that in, you will probably have several hundred billion more.

CAVUTO: Well, the guys in Washington say they can afford it.

FORBES: Of course.

They say anyone can afford it, especially when it comes to their spending habits, which we as a nation cannot afford.

CAVUTO: So you're against this whole windfall profit tax, right?

FORBES: Oh, it's nonsense.

CAVUTO: Why?

FORBES: If you want to encourage exploration, you want the capital resources to be there.

What everyone in Washington forgets is, this is a cyclical industry. In 1998, for example, late '90s, oil went down to $10 a barrel. You had exploration being slashed. So, you want them to do it. But if you're going to hit them when they have a good time, they're not going to invest to cover us during the bad times.

CAVUTO: Are you worried that even some moderate Republicans are in this camp, you know, just to stick it to these guys?

FORBES: Yes.

It's not even moderates. Chuck Grassley is in this game.

CAVUTO: Good point.

FORBES: And what it is, is a lack of leadership.

CAVUTO: He said he wouldn't make it an edict, Steve. When he was on this show, he said, I would urge them to volunteer to do so. The oil companies say, it's not our job to do your job.

FORBES: Yes. Well, they have slipped in, apparently, a provision, which is a back door excess profits tax, by changing the deal with how you deal with inventories for tax purposes.

And they also conveniently overlooked that companies like Microsoft (MSFT) and FedEx (FDX) and Coke (KO) and some others have higher profit margins. So, are we going to put an excess profits tax on McDonald's, because everyone goes there at lunchtime or breakfast time? I mean, it's ridiculous. If you want investment, you have got to have the capital.

And, by the way, why don't they remove the restrictions on offshore drilling? There's globs of oil and gas out there.

CAVUTO: Well, you must have read my mind. We had Nancy Pelosi here yesterday. And one of the things that she's championing and then a lot of other Democrats, as a part of their agenda, is this idea that we can have energy reform and energy independence without going for coal, without going for nuclear, and without exploring for more oil here. Can we?

FORBES: Sure, if we want to go back to living in caves or homes with 40 degrees wintertime and 95 in the summertime. Yes, we could do that and have independence. We also won't have much of an economy.

CAVUTO: So, we can't conserve our way to better fuel?

FORBES: In business, you can't cut your way to prosperity. You have to grow the top line as well. The same is true of an economy. If we want it to grow, we are going to consume more energy. But there's a lot of energy out there, if we allow ourselves to exploit it.

CAVUTO: I knew, when I would have you here, Steve, I was going to ask about the New Jersey election without being parochial. The Democrat Jon Corzine, won overwhelmingly against Doug Forrester.

Many thought that that was a predictor, as was the Virginia race, of things to come for Republicans, that they're in deep doo-doo. Are they?

FORBES: They are today.

And the reason they are today is, they go after will-o'-the- wisps, like excess profit taxes, instead of leading, like removing restrictions off offshore drilling, so we get plenty of natural gas to get us through the wintertime, putting a specific proposal for Social Security, real reform on taxes. These are positive things. But, if you don't lead with the positive, people are going to turn negative on you.

CAVUTO: I always seem to try to sandbag you. But, given the state of New Jersey right now, a Senate seat that will soon be open, interest in running for that when Corzine gives it up, gives to a Democrat? Then it's up.

FORBES: No plans. I'm very happy now being an agitator, stirring the pot, and looking at what's happening in Washington. There's a lot of pot that has to be stirred, sadly.

(LAUGHTER)

CAVUTO: Any interest in running for president?

FORBES: No. Again, I'm going to be an agitator, try to educate candidates — formidable task, but somebody has got to try.

(LAUGHTER)

CAVUTO: Somebody has got to do it.

Steve Forbes, thank you very much.

FORBES: Thank you.

CAVUTO: You can catch Steve and rest of the "Forbes on FOX" crew Saturday morning — and that, of course, is his book — 11:00 a.m. Eastern time right here, as Steve will keep telling you, the number one place for business news in broadcasting. His is the number one place in print. We got the best of both worlds.

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