Senate Democrats Plot To Punish “Big Oil”
I’m not quite sure when Hugo Chavez was elected to the U.S. Senate, but the legislation proposed yesterday by Democrats in that body regarding government regulation of the profits of private industry and the imposition of a windfall profits tax certainly sounds as if it comes straight from the playbook of the Venezuelan socialist dictator.
From the New York Times:
“Senate Democrats on Wednesday called for a temporary special tax on oil companies’ profits and a rollback of $17 billion in oil industry tax breaks as part of an energy package. The Democrats are also seeking federal penalties on energy price gouging and a suspension of oil deliveries into the government’s emergency reserve.
The proposed 25 percent profits tax would apply just to oil company earnings above what would be considered “reasonable” and only if those profits are not reinvested in expanding refinery capacity or renewable energy sources, according to a summary of the proposals.
The tax would expire after two years.”
First, a “temporary” tax? Yeah, right. When was the last time the government levied a tax and then later rescinded it? I’ll go out on a limb and say never. Secondly, “price gouging” as determined by who? Harry Reid? Chuck Schumer? Third, “reasonable profits”? Again, who becomes the arbiter of what is reasonable? Lastly, investing in renewable sources of energy. Does that mean more spending on things like the brilliant government idea of ethanol, which has driven grocery prices through the roof and led to a worldwide food shortage?
Here is the Democrat’s convoluted logic behind this scam:
“Democrats characterized their proposal as attacking “the root causes of high gas prices,” although it was not clear how their plan would appreciably affect high oil costs, set in a global market, or gasoline prices edging toward $4 a gallon.”
The reason they are not quite clear is because it will have no effect on gasoline prices. That’s not the point of the legislation. The point is to pander to voters by appearing to be doing something about gasoline prices while actually doing nothing at all. In other words, politics as usual.
Until our esteemed Senators devise a way to control the commodities markets, they will have little or no effect on the price of a barrel of oil or a gallon of gasoline.
Here are a few quotes from our Senators. Tell me if this sounds like capitalism or socialism to you. First Harry Reid;
“Instead of helping Big Oil make more money at the expense of average Americans, we are forcing oil companies to change their ways. We will hold them accountable for unconscionable price-gouging and force them to invest in renewable energy or pay a price for refusing to do so.”
Max Baucus:
“Repealing tax breaks for Big Oil will stop these companies from running away with more taxpayer cash while they’re already high on the hog,”
Chuck Schumer:
“Oil companies are racking up obscene profits left and right while American families are stretched to the limit by skyrocketing gas prices. It’s time for Big Oil to pay its fair share so Americans can see a little relief. The windfall profits tax will do just that, and help spur innovation in the process.”
Maria Cantwell:
“We need a cop on the beat to patrol the markets.”
In a capitalist system, forcing private industry to conform to government edicts, deciding which industries are high on the hog and which aren’t, determining what is and is not obscene profit, and patrolling markets, is not the job of the government. Even if it is an election year.
Who else but the Federal Government has the clout to curtail the excessive profits that oil companies are amassing? While local, national and global economic forces contribute to the high price of oil (Chinas ravenous appetite is but one example), not all of the excessive price can be attributed to that factor. Speculation on the spot market has gotten out of control and for every legitimate reason for todays cost of oil there are costs that are soley associated with greed. Greed at the expense of everyone of us. While I do not like the taxing of “excessive” profits as the determination of excessive is subjective, and think the elimination or reductin of tax breaks specific to the oil industry might help temporarily restrain these excessive profits, the only solution I can see in our society is to eliminate demand. The immediate solution could be to impose the gas guzzler tax based on a monthly fee, (payable by the owner of said vehicle without allowing a tax writeoff), rather than something paid once at the time of purchase of these excessively large vehicles. You have the right to choose to purchase and operate one of these vehicles. Along with this expression of free choice comes the responsibility and consequences of such choice.
Comment by cbcory | May 9, 2008
Good post. The Democrat Party longs for a planned economy. The free market tends to get in the way of their despotic and ignorant ambitions.
Comment by tsfiles | June 19, 2008