AN EXTRA TAX ON OIL COMPANIES WILL RAISE FUEL PRICES

The companies will just add the tax into their cost base and proceed as before. Politicians huffing and puffing will HURT Joe Average, not help him. Excerpt from a comment by an economist below:

As gas prices top $3 per gallon, politicians are cashing in big - by throwing bombs at the U.S. oil industry. As in every crisis, Washington is suffering from a predictable case of "do something" disease. Products of the ready-to-eat microwave culture, Americans want an instant solution to high energy costs, and this lends itself to grandstanding and election-year maneuvering by politicians of all stripes. Numerous lawmakers, from Senate Minority Leader Harry Reid (D-Nev.) to Sen. Arlen Specter (R-Pa.), are lining up to support a new federal windfall profits tax, with the aim of redistributing profits from "greedy" oil companies.

But lawmakers could benefit from a history lesson. The last time this country experimented with such a tax was the Crude Oil Windfall Profit Tax Act of 1980. According to a 1990 Congressional Research Service study, the tax depressed the domestic oil industry, increased foreign imports and raised only a tiny fraction of the revenue forecasted. It stunted domestic production of oil by 3% to 6% and created a surge in foreign imports, from 8% to 16%.

Politicians calling oil companies "greedy" is more than a little ironic. Tax Foundation studies have shown that state and federal treasuries profit handsomely from oil industry sales. The average American motorist pays taxes of 46 cents a gallon on gasoline, of which 18.4 cents a gallon goes to the federal government. States and localities pocket the rest. The nation's energy companies are already providing a "windfall" of taxes. According to Department of Energy data, from 1977 to 2004, federal and state governments extracted $397 billion by taxing the profits of the largest oil companies and an additional $1.1 trillion in taxes at the pump. In today's dollars, that's $2.2 trillion - enough to buy a Toyota Prius for every household in the nation....

It would be unfair and absurd to tax workers at different rates, based merely on the industry they work in. Similarly, it makes no sense to tax an industry punitively based on the volatility of its profits. Oil will always be a boom-or-bust business.

The U.S. debate over which group of people - workers, shareholders or consumers - ends up paying the bulk of these corporate taxes will go on forever. But the undisputed and most important point is that individuals pay taxes, not corporations. Therefore, attempts to punish oil companies for "obscene" profits by instituting additional taxes ultimately cause all of us to pay the price. Consumers will pay more at the pumps, and the five oil-producing states that suffered in the oil bust, including hard-hit Louisiana, won't benefit from the boom.

More here

Some more comments below:

Republicans target "economic crimes": "Should anyone doubt that the Republicans have become the sworn enemies of the forces of supply and demand, as well as free enterprise, the following statements should change the minds of most skeptics: Congressional GOP leaders on Monday formally called on President Bush to launch an investigation into possible price gouging by oil companies, as gas costs shot up nearly 25 cents a gallon in two weeks. 'Anyone who is trying to take advantage of this situation while American families are forced into making tough choices over whether to fill up their cars or severely cut back their budgets should be investigated and prosecuted,' House Speaker Dennis Hastert [R-Ill.] and Senate Majority Leader Bill Frist [R-Tenn,] wrote in a letter to President Bush."

Scapegoating big oil is not the solution: "Oil prices continue to rise. Why would anyone expect otherwise given current circumstances? Let us start with the issue of destabilising the production of oil. The invasion of Iraq harmed oil production and everyone knows it. Military invasions are not good for production under most circumstances. Then we have Bush sabre rattling with Iran pushing prices up even more. We can't factor out the fact that a large amount of oil, in Venezuela, is under the control of a lunatic either. The supply of oil is very tenuous at best. Between the bad policies of George Bush and those of Hugo Chavez the world's oil supply is in trouble."

Real relief on gas prices: "Let them eat cake -- or wait in line for a Prius. The high price of gasoline is the talk of the nation. But there is little talk about government's piece of the action -- the revenue collected from federal and state gas taxes. Why not temporarily roll them back? That would provide instant consumer relief -- not the future, fantasy relief suggested this week in Washington. 'Gasoline price increases are like a hidden tax on the working people,' President Bush said in a speech that called for a federal inquiry into possible price-gouging, an easing of environmental rules on gasoline production, and a halt to new purchases for the nation's energy reserve. Bush conveniently ignored one built-in cost: Government levies include a federal 18.4 cents-a-gallon tax on gas; and the states tax on top of that. In Massachusetts, the gas tax includes a 21-cents-a-gallon excise tax and a 2.5-cents-a-gallon fee to reimburse gas stations for environmental cleanup."

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ELSEWHERE

"Don't ask, don't tell" suit dismissed: "A federal judge in Boston yesterday dismissed a lawsuit challenging the military's 'don't ask, don't tell' policy, ruling that Congress has the authority to exclude gays from the armed services. US District Judge George A. O'Toole Jr. found that Congress made a rational decision to adopt the policy in 1993 after holding lengthy hearings and concluding that openly homosexual service members would have a negative impact on the military. The policy prohibits the military from asking about sexual orientation, but orders the dismissal of personnel who disclose that they are gay, engage in homosexual activity, or are outed by someone else. 'The legitimacy of the end Congress sought to serve -- maintaining effective military capability by maintaining high standards of morale, good order and discipline, and unit cohesion -- cannot be doubted,' O'Toole wrote. But, in his 41-page decision, O'Toole added that 'deciding that Congress has made a rational choice is not the same as deciding it has made a wise choice.'"

Government pesters wounded soldiers over debts: "Nearly 900 soldiers wounded in Iraq and Afghanistan have been saddled with government debts as they have recovered from war, according to a report that describes collection notices going out to veterans with brain damage, paralysis, lost limbs and shrapnel wounds. The report from the Government Accountability Office, to be released at a hearing today, details how long-recognized problems with military computer systems led to the soldiers being dunned for an array of debts related to everything from errors in paychecks to equipment left behind on the battlefield."

Mexican corruption: "Mexican politicians continuously demand more visas for their citizens, an expanded guest-worker program, and "regularization" of illegal aliens living north of the Rio Grande. While neglecting to mention that the United States admits nearly one million legal newcomers each year, they also fail to publicize: (1) the extremely high salaries they receive, often-in the case of federal and state legislators-more than their counterparts in developed nations that have substantially longer annual sessions, (2) the generous stipends that they grant themselves, including year-end aguinaldos and end-of-term bonuses of tens of thousands of dollars known as bonos de marcha, and (3) the generous sums that party leaders in legislative bodies have to spend with few or any strings attached. For example President Vicente Fox ($236,693) makes more than the leaders of France ($95,658), the U.K. ($211,434), and Canada ($75,582)."

For more postings, see TONGUE-TIED, EDUCATION WATCH, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE and AUSTRALIAN POLITICS. (Mirror sites here, here, here, here, here, here and here).

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"All the worth which the human being possesses, all spiritual reality, he possesses only through the State." -- 19th century German philosopher Georg Wilhelm Friedrich Hegel. Hegel is the most influential philosopher of the Left -- inspiring Karl Marx, the American "Progressives" of the early 20th century and university socialists to this day.

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialistisch)

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