Senate to Vote on Windfall Profit Tax
The Senate Democrats’ solution to high energy prices is higher taxes. A vote might come today:
With gasoline prices topping $4 a gallon, Senate Democrats want the government to grab some of the billions of dollars in profits being taken in by the major oil companies.
Senators were to vote Tuesday on whether to consider a windfall profits tax against the five largest U.S. oil companies and rescind $17 billion in tax breaks the companies expect to enjoy over the next decade.
“The oil companies need to know that there is a limit on how much profit they can take in this economy,” said Sen. Richard Durbin of Illinois, the Senate’s No. 2 Democrat, warning that if energy prices are not reined in “we’re going to find ourselves in a deep recession.”
But the Democrats are going to have to overcome staunch Republican opposition to any new taxes on the oil industry. The five largest U.S. oil companies earned $36 billion during the first three months of the year.
Majority Leader Harry Reid, D-Nev., will need 60 votes Tuesday to proceed with the oil tax legislation in the face of a threatened GOP filibuster. If he doesn’t get 60, he likely will pull the bill from the floor.
Sen. Obama has campaigned for it for a while. Michelle Malkin posted video of Sen. McCain willing to take the bad idea into consideration.
And it is a bad idea if the last time this was tried is any indication. For one thing the expected revenue won’t come in. Second, the tax will reduce domestic production making the U.S. even more reliant on foreign oil.
It’s time to repost the lesson the Investors Business Daily editorialists have been trying to tell Democrats:
Our free-market economy is built on profit. Higher profits mean more jobs, higher incomes, more investment in equipment and people, higher standards of living. Yes, profits are the engine for all of this — and that includes the profits of “Big Oil.”
By signaling that supply is scarce, higher profits encourage more production. Except, that is, when Congress through its inept lawmaking stands in the way. And that’s the case now with the oil industry.
Congress seems almost constantly at war with the oil companies — slapping them with taxes and pillorying their CEOs while ignoring the fact that higher profits lead to more exploration, drilling and development.
If anyone is to blame for our current energy mess, it’s Congress. At least 20 billion barrels of oil sit untapped in Alaska and another 30 billion lie offshore. Such sources that could help satisfy U.S. demand for years to come. Yet, Congress has put them out of bounds.
“Senate Debates Higher Profits Tax on Oil Companies”
[picture via xampl9]
It is stupid to tax a commodity when the price is already painfully high for most consumers. Do the democrats actually believe the cost of the tax will just be taken from the oil companies’ profits and not passed onto the consumers? That’s foolish.