Gas Prices and Politics
The only thing worse than a trip to the gas pump these days is listening to John McCain, Hillary Clinton and Barack Obama talk about energy policy. John McCain and Hillary Clinton both say they’ll bring us relief at the pump with a temporary moratorium on the 18.4 cent per gallon federal gas tax. To his credit Barack Obama opposes the moratorium idea as a political stunt but supports a 1970s style windfall profits tax on oil companies (as does Clinton).
Never mind that the federal government already takes 35% right off the top with the corporate income tax, Barack Obama wants to slap and additional tax on what he calls “excess profits”. What exactly are excess profits? As far as I know a business is supposed to turn a profit and theres no limit on how large that profit can be. But that’s neither here nor there, the real issue is this…
If our elected leaders really wanted bring down the price of gas and stimulate the economy they’d be talking about tapping domestic energy supplies both off shore and in Alaska, reducing the corporate tax rate and strengthening the dollar. They wouldn’t be talking about cheap political stunts or reviving failed policies from the 1970s.
Lets not forget windfall profit taxes have been tried before and they ended up reducing domestic oil production and increasing imports*… Exactly what we don’t want.
*The Wall Street Journal, “Windfall Profits for Dummies” May 3, 2008, Page A10: “The Congressional Research Service found in a 1990 analysis that the tax reduced domestic oil production by 3% to 6% and increased oil imports from OPEC by 8% to 16%”.
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