Tax Something And Get Less Of It...
The Democratic Congress in the US is again bantering around the idea of a 'windfall profit tax' aimed at oil companies. Willy Sutton, the depression era bank robber was best known for this being attributed to him....
Sutton is famously (and probably falsely) known for answering a reporter, Mitch Ohnstad, who asked why he robbed banks by saying, "because that's where the money is."Therefore, the Willy Sutton Democrats in Congress see this as a fortuitous opportunity to raise taxes on a small group of companies and take advantage of them during a time when they are not too popular. Additionally, our representatives in Congress looking to protect their sorry asses since they have foiled every attempt to generate energy domestically from Bill Clinton vetoing drilling in ANWAR and the Kennedy's fighting against clean windpower generation in Massachusetts. So now that there is strong growth in global energy demand, they feel compelled to try justify their idiotic miscalculations by blaming oil companies. Remember that only around 6% of global oil reserves are controlled by the big US based oil companies whereas 80% is owned by state owned national oil companies around the globe.
So what are the clowns in Congress to do? Tax oil companies is their answer. Of course Democrats answer to every problem is to tax. But these idiots plan to tax American oil companies making doing business in the US more expensive for these enterprises. So, why should they continue to invest in the US under a hostile tax regime? They won't. They will invest capital on the margin in other places and sell external to the US. The old economic adage 'when you tax something you get less of it' will create further problems. Marginal increases in availability of energy will only benefit those outside of the US and not Americans. But why pick on oil companies?
Or suppose Congress decides to expand a windfall-profits tax to other sectors of the economy. After all, the financial performance in 2007 of a number of other major U.S. industries far exceeded the oil industry's performance.So lets just punish anyone that makes money in the US. How juvenile can these blockhead Democrats get? Unfortunately, very very juvenile as these clown intend on raising taxes on everyone.
The latest published data for last year show that the oil industry earned 9.6 cents for every dollar of sales, compared with 20.1 cents for Internet information providers, 19.1 cents for beverage and tobacco producers, 16.7 cents for drug manufacturers, and 15.8 cents for computer equipment makers.
Wouldn't it be logical to pursue industries that are twice as profitable as Big Oil if populist politicians really believed the kind of voodoo economics they propound in congressional hearings?