Well, what are the Socialist Democrats up to now in the U.S. Senate?

Senate Considers Windfall Profits Tax on Big Oil

Great. Gas is at $4 a gallon, and Harry Reid and his band of merry Socialist henchmen propose to do something guaranteed to raise the price of gas even further and harm the economy. Econ 101: Corporations do not pay taxes. Not now, not ever, and to think they do is to subscribe to what I call the “Big Bag o’ Money” Theory about how things work. It goes like this: Exxon, say, makes all this money by selling gas to consumers, and they stick all the money in this big bag called “profits”. Then, Congress takes a look at the profits bag, determines something stupid like “The oil companies need to know that there is a limit on how much profit they can take in this economy,” (Socialist Dickie Durbin, D-Saigon), and decides to tax the “windfall profits” (whatever that means). And Exxon says, “ah, yep, ya got us! You’re right! We’re snakes, making all this profit! We’ll dip into our Big Bag o’ Money and pay the extra taxes, and promise to be good boys and girls from here on out!”

No…corporations do not pay taxes. You pay taxes. I pay taxes. Poor people pay gas taxes, just like rich people. And we all eat, and so when gas is taxed, and prices go up at the pump, our food costs more (yes, food that poor people eat, along with middle-class and rich people). Further, publicly-traded companies render dividends to the zillions of Americans who are invested in the stock market–and when taxes are raised, people feel the squeeze and buy less gas and there are less profits for all the folks who’ve invested money in the stock market and…

You get the picture.

Now, the question that comes is, are Socialist Democrats stupid not to know basic Econ 101? I mean, it’s a fair question to ask, because the economics of the thing isn’t even arguable. My answer? Nope, not one bit; there’s not a Socialist Democrat in Congress who doesn’t very readily understand the economics of the thing. So…if they’re not stupid, what could they be? Hmmm…

You don’t think…no…they couldn’t be…well, but then…I mean, is it even, like, possible that maybe they’re…evil? Like, that they’d use the misery of the American public, an American public educated in failing public schools that don’t help our kids actually think about things like basic economics, to fool the easily-fooled American public into thinking that they were doing them a real service in socking it to those evil oil companies, when in fact they were actually
– Raising more money to spend on their beloved (worthless) social programs?
– Accumulating more power to themselves?
– Aiding their own re-election chances, because the easily-fooled Econ 101 flunkers actually believe that the Socialist Democrats are doing something to help them?
– Perpetuating the hilarious myth that Socialist Democrats are the party that looks out for the little guy, takes up for the poor, and is concerned for the “working man”?

I mean, if I were a cynical person (and of course, TNKZ readers know that I’m not, you know), I’d be tempted to think that the Socialist Democrats were up to something pernicious, instead of trying to help the American people by taxing our way out of the problem.

Update: Predictably, the Least Qualified, Most Liberal Presidential Nominee in History has called for more taxes on the big oil companies.

5 responses »

  1. Graham says:

    Unfortunately, these are easy targets. Simply have a few trade unionists whine about the “obscene profits” of oil companies…

    “Windfall taxes” to help “schools’n’ hospitals” are again a simple strategy. Get people to ask whether oil giants, and other big companies, would even notice a few millions going from their profits, emphasise that it would make such a big difference to children and ill people (for maximum heartstring-tugging, talk about ill children) and hey presto, Conservatives can be portrayed as heartless monsters.

  2. Bob Robinson says:

    Evil! Pernicious!

    Why those terrible socialist democrats, I HATE them!

    They are not like the good and sinless Republicans, who would never use issues like the fear of terrorism or promises to stop abortion to get elected.

  3. Byron says:

    Well…since I’m not a Republican, I wouldn’t call them sinless… πŸ™‚

    Further, I don’t hate Democrats, but I do hate stupid, clearly counterproductive policies that end up hurting everybody, particularly the poor that the Democrats ostensibly stick up for. Beyond that, it’s not much of an argument to say, “the Republicans are bad too”. Beyond that, a previous post of mine suggested that I’m probably not going to vote for either the Democrat representative OR the conservative Republican Senator who represent me, because I’d dump every last incumbent in Congress if it were up to me.

    So deal with the issue, Bob; do you really think that putting windfall taxes on Big Oil will solve the problem? Further, do you agree that it’s asinine to restrict drilling 50-200 miles offshore, as the Socialist Democrats voted last week to continue to do? Further, is there any logical reason to restrict drilling in 2000 out of 19 million acres in the tundra we know as ANWR? We have a massive problem here; it’s called “dependence on foreign oil”; there are some reasonable solutions and some incredibly stupid ones that won’t work, and the Democrats seem determined to do everything in their power to choose the ridiculous and untenable ones.

    And play class warfare games (“look at the evil oil companies!!!”) at the same time…

  4. Bob Robinson says:

    First, about my point:
    It does little to call one party “evil” and “pernicious” without also saying that the same is true for the other. It smacks of being slanted for the sake of smear punditry. We can agree that BOTH parties pander to their bases by over-hyping their issues.

    Second, about the windfall profit tax:
    The idea is to take that tax on profits and invest it in research and development of renewable energy. I’d say I favor taking those profits and doing that. But I don’t think the government is the best choice for this task, and thus taxing profits is the wrong route to take. Since the oil companies have dragged their feet investing their profits into R&D for renewable energy, we should find ways to encourage them to take their profits and invest them into research of renewable energy and development of existing oil fields. The Baker Institute for Public Policy just finished a two-year study looking at oil companies and how they spend their money – the head of the study said, “These companies are spending a very small amount of their operating cash flow on exploration. They are spending the majority of their funds buying back stock.” In other words, their profits have been going mainly to the current shareholders and not into the nation’s future. Capitalism is at its best when it takes risks, investing in research and development of new market potentialities, and thus reaping the reward in profits. We need to encourage the oil companies to take these needed risks for the sake of the good of the nation. And we need to NOT penalize them if they are profitable in doing so!

    And last, about drilling in ANWR:
    The U.S. Energy Information Administration, an independent statistical agency within the Department of Energy, just issued their findings that “if Congress approved development (of ANWR) in 2008, it would take 10 years for oil production to commence. With production starting, then, in 2018, EIA said the most likely scenario is that oil would peak at 780,000 barrels per day in 2027 and decline to 710,000 barrels per day in 2030. Currently, the United States consumes about 20 million barrels of oil per day.”

    The current price of oil is $130 per barrel. “New oil from ANWR would lower the world price of oil by no more than $1.44 per barrel β€” and possibly have as little effect as 41 cents per barrel β€” and would have its largest impact nearly 20 years from now if Congress voted to open the refuge today.”

    The EIA says that new oil from Alaska would reduce foreign oil dependence only “slightly.” “With the United States currently on track to get 54 percent of its oil from overseas by 2030, EIA said, if ANWR were opened, the share of oil from foreign countries would drop to 48 percent in the best-case scenario or 52 percent if ANWR turns out to produce at the lower end of the range of projections.”

  5. Byron says:

    OK, Bob, sure, both parties are full of politicians. I tend to disagree with Democrat policies almost 100% of the time, and with Republican policies, oh, 40-50%, I guess.

    Now, you’re right on the second point: we need to find ways to stimulate oil companies to look for alternative sources. Taxing their profits, somebody arbitrarily determining how much profit is “reasonable” (I’ve not looked deeply into it, but I’ve heard some suggest that oil company profits, taken as a percentage, aren’t out of line; it’s just that when you look at total dollars made, the numbers sound really, really big) is socialism. Find a market solution to encourage exploration, and of course I’m on board.

    Finally, as to ANWR, without being ugly, my answer to your numbers is basically, “so what?” Nobody thinks ANWR is the solution to the whole problem, just like drilling 50-200 miles offshore on the continental shelf isn’t the whole answer to the problem, and nobody thinks that the problem will be solved overnight. But in the case of these two instances, there is no reasonable compelling reason not to drill there (it’s environmental hysteria, not sound reasoning, that drives environmental opposition), and the point is that we should be saying “yes” to anything and everything that can be reasonably, ecologically-safely, garnered for our energy usage in order to get us to where we’re not at the mercy of OPEC. In some senses, ANWR is symbolic of the ridiculous lengths that environmental extremism has taken us to…2000 acres out of 19 million acres of tundra, when gas is at $4 a gallon, and we can’t tap into it?

    Oh, and by the way, from what I’ve seen, there are studies that suggest we won’t really know what’s up there until we get into it, but even if those numbers are spot-on, ANWR can be a piece of the puzzle, and should be, along with nuclear energy, coal-to-gas technologies, etc. And the clock is ticking, which is why, IMHO, saying, “it’s 10 years off”, or what have you, only means one thing: we should have started 10+ years ago, but better late than never, because we’ve got to get to energy independence.

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