This isn't a tax on oil companies it is a tax on everyone.
Hal Varian (who later became Chief Economist at Google) wrote a good piece[1] summarizing the basics in 2000 for the New York Times.
The summary: "A gasoline tax in a small country falls mostly on the residents of that country. The world price of oil is essentially independent of the taxing policies of most countries, since most countries consume only a small fraction of the amount of oil sold.
"But the United States consumes a lot of oil -- almost a quarter of the world's production. That means it has considerable market power: its tax policies have a major impact on the world price of oil, and economic analysis suggests that in the long run, a significant part of a gasoline tax increase would end up being paid by the producers of oil, not the consumers."
[1] http://people.ischool.berkeley.edu/~hal/people/hal/NYTimes/2...
2) Externalities. Also Econ 101. We've got a basket of reasons, from environmentalism to national security, to limit our dependence on oil. Kicking in taxes while the prices are low can prevent markets from forgetting all the things they started to build in during $120/barrel oil, continuing to limit our future dependence, with the bonus that we now have a relief valve we can ease up on if things get really tough with oil prices.
It's actually the most market-based way to attack the myriad problems the oil economy creates for us.
Now oil is not perfectly competitive and you are right. But it is rather close. So you can still expect the majority to come from the consumer.
No, the determinant of tax incidence is price elasticity, which is orthogonal to competitiveness of a market. [1]
Oil is interesting because it is somewhat price inelastic both for demand and supply. People's ability to stop driving is limited in the medium term, but also many suppliers of oil aren't capable of completely exiting the oil business.
In practice, I suspect the incidence is in fact roughly 50/50 if applied in a huge country like the United States (the incidence would be much on consumers in smaller markets).
https://en.wikipedia.org/wiki/Perfect_competition#Profit
If corporations always operate at revenues=expenditures, then the entire tax must fall on the buyer in the long run. The price inelasticities you're talking about are only in the short run.
I'm well aware of what defines a perfectly competitive market.
> If corporations always operate at revenues=expenditure
That's not what zero economic profit means. Taxes can also come out of the owner's opportunity costs if the have low elasticity of supply.
Then you should have addressed that point in your first reply to randyrand. It was the entire point of his comment.
> That's not what zero economic profit means.
If you're just talking about the difference between economic profit and accounting profit, I'm well aware of the difference. My point stands.
> Taxes can also come out of the owner's opportunity costs if the have low elasticity of supply.
Not in the long, as I qualified. In the long run, the only thing owners of capital bring to the table is pure capital itself, and they will simply redistribute capital to the next most profitable venture, which in a large economy is essentially identical.
https://www.aei.org/publication/the-truth-about-all-those-su...
Exxon and Chevron, as two examples, have been paying essentially the highest corporate tax rates on earth for a long time.