[StBernard] Six House Dems Would Confiscate 'Excessive' Oil Profits

[Westley Annis]

Six House Dems Would Confiscate 'Excessive' Oil Profits
    
Posted by Steve Maley (Diary)
Sunday, January 22nd at 8:35AM EST

Six House Democrats, led by Rep. Dennis Kucinich (D'OH), have filed a bill
aimed at controlling gasoline prices. Styled the "Gas Price Spike Act", H.R.
3784 would establish a "Reasonable Profits Board" which would have the power
to confiscate 100% of oil company profits above a level that they deem to be
"reasonable".

I know: "You had me at 'Kucinich'."

Kucinich is either a naive buffoon, a craven panderer to his electorate, or
a throwback to Soviet-style central planning. (Not that those descriptions
are mutually exclusive.) That he could find five other elected nitwits
(Reps. Woolsey[1], Langevin, Conyers, Fudge and Filner[2]) to put their
names on such an unconstitutional socialist fantasy is an indication that
the Progressive Wing of the Democratic Party has "progressed" beyond
capitalism.


According to a Thursday post at TheHill.com:

The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale
of oil and [natural] gas that ranges from 50 percent to 100 percent on all
surplus earnings exceeding "a reasonable profit." It would set up a
Reasonable Profits Board made up of three presidential nominees that will
serve three-year terms. Unlike other bills setting up advisory boards, the
Reasonable Profits Board would not be made up of any nominees from Congress.

The bill would also seem to exclude industry representatives from the board,
as it says members "shall have no financial interests in any of the
businesses for which reasonable profits are determined by the Board."

Oil companies would only be able to make less than a reasonable profit
without penalty. Anything over 105% of reasonable would be taxed at 100%.
Proceeds of the confiscation would be dedicated to tax credits for
high-milage vehicle purchase and mass transit subsidies for the poor.

Peeling back the layers of stupidity in H.R. 3784 would be akin to peeling
an artichoke. In the interest of time, I will cut to my central point.

Implicit in the very suggestion that a Windfall Profit Tax is called for is
the notion that somehow the oil companies are able to manipulate the price
of oil, and hence, gasoline.

Gasoline prices are at historically high prices. Despite the spike above
$4.00 per gallon in 2008, you actually paid 10% more at the pump in 2011.

When we refer to the industry as "oil and gas", we mean "oil and natural
gas", not oil and gasoline. All oil companies make a substantial fraction of
their revenue - many more than half - from natural gas.

The price of natural gas has plunged to 10 year lows recently as a result of
warm winter temperatures, slack industrial demand and burgeoning supplies.

Natural gas prices have fallen to levels that make it difficult to justify
drilling for more. Many of the new supplies of gas that come on will be
incidental to the successful search for oil.

I challenge anyone who believes that oil companies control the price of oil
and gasoline to explain how they do it, and why they seemingly have no
control of natural gas.

[1] Rep. Lynn Woolsey (D-CA), chair of the House Progressive Caucus from
Marin Co., CA.

[2] Rep. Bob Filner (D-CA). From his Wikipedia entry:

Filner has been a vocal supporter of the People's Mujahedin of Iran, a group
designated as a terrorist organization by the United States. Filner has long
argued that the group's designation should be removed, and considers the MEK
an ally against the Iranian regime. He has accepted free trips, and paid
speaking engagements from the group for which he has been criticized by the
National Iranian American Council.

The other co-sponsors are John Conyers (D-MI), Rep. Marcia Fudge (D-OH) and
Rep. Jim Langevin (D-RI).