Tuesday, June 10, 2008
Who would have believed that Ayn Rand's 1957 epic saga that pitted "producers" and "looters" against one another would ever become a reality in this country. Today in a procedural vote on the floor of the U.S. Senate it almost did. 51 - 43 was the vote that defeated a measure straight out of James Taggart's bag of tricks. Yes I'm talking about the windfall profits tax that Senate dumbnocrats are proposing, formally known as the Consumer First Energy Act. The Senate Democrats have the audacity to punish publicly traded corporations for doing exactly what publicly traded corporations are supposed to do. Maximize shareholder wealth. The Left wing liberals are fond of spouting that the oil industry as a whole has raked in record profits over the last few years and that it simply isn't fair. Fair? They go on to state in the proposed legislation that they would impose a 25 percent tax on profits over what would be determined "reasonable". Reasonable? Reasonable is a relative term. Who decides what is "reasonable"? Mind you this is in addition to the taxes the corporation already pays. Yes the industry as a whole has made record profits and yes they do have some government induced tax incentives, but even taking those incentives into account the big oil corporations pay income tax at approximately the 30% rate. So if we use the so often misrepresented quote of "The five largest U.S. oil companies earned $36 billion during the first three months of the year." then we can easily see that this is a win win situation for the government in the form of 10.8 billion in additional tax revenue, not to mention the boon to investors and employees who also see an increase in ROI. Sen. Dick Durbin of Illinois was quoted as saying "The oil companies need to know that there is a limit on how much profit they can take in this economy." Who is government to tell a corporation, a legal entity, how much profit they can make? How absurd is the fact that this was even proposed? Majority Leader Harry Reid, D-Nev., without the 60 votes he needed, switched his vote to "nay," so he could bring up the bill later. But the bill is essentially dead for now. Oil executives, testifying before Congress last month, called the proposed taxes "punitive" and warned that they would discourage domestic oil and gas exploration and production, possibly causing prices to rise instead of fall. But those of you old enough to remember this is not the first time this has been proposed or even passed! The American Petroleum Institute, which represents the major oil companies, has been reminding lawmakers that in the Carter administration, when the government imposed windfall profits taxes on oil companies, domestic oil production dropped and imports increased, resulting in a multitude of problems the least of which was higher prices at the pump and increased trade deficits. Dumbnocrats, of course rejected this common sense comparison. Today the government is going after oil companies who they see as being to successful, tomorrow it might be small business owners and after that individuals. It seems that academia's view of an Orwellian utopia is just around the corner. War is Peace, Freedom is Slavery, Ignorance is Strength.
Posted by The Ghost of Jefferson at 1:17 PM