If Rep. Dennis Kucinich (D-OH) has his way, the government will determine how much profit oil companies can make.
Kucinich, along with five other House Democrats, want to establish a "Reasonable Profits Board" that would determine what a "reasonable profit" is and confiscate 50 - 100 percent of anything over that amount in a "windfall profits tax."
The measure, however, does not specify what constitutes a "reasonable profit."
Reps. John Conyers Jr. (D-MI), Bob Filner (DCA), Marcia Fudge (D-OH), Jim Langevin (D-RI), and Lynn Woolsey (D-CA) have co-sponsored the bill, H.R. 3784, also known as the Gas Price Spike Act.
According to The Hill, the board would consist of three presidential nominees who would serve a three-year yerm.
The Hill adds:
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."
According to the bill, a windfall tax of 50 percent would be applied when the sale of oil or gas leads to a profit of between 100 percent and 102 percent of a reasonable profit. The windfall tax would jump to 75 percent when the profit is between 102 and 105 percent of a reasonable profit, and above that, the windfall tax would be 100 percent. The bill also specifies that the oil-and-gas companies, as the seller, would have to pay this tax.
According to Kucinich, the revenues generated would fund alternative transportation programs when gas prices spike, partly in the form of grants for mass transit.
"Gas prices continue to rise, creating a hardship for the American people," Kucinich said.
"At the same time, oil companies are making record profits gouging their customers. This bill would tax only the excess profits and create forward-thinking transportation alternatives."
Ed Morrissey of Hot Air notes:
First, a reality check is in order. While politicians like to hyperventilate over the gross dollar amounts of profit from oil companies, profit is most accurately measured as a percentage — the ratio of profits to the cost of producing those profits. Does the oil industry have a record of exploitive profit margins? Hardly. For 2009, the oil and gas industry ranked 9th on Fortune’s list with a margin of 10.2%, exactly half of that of the network/communications industry, which finished first in 2008 as well. In fact, the margin for oil/gas decreased by three and a half points between 2008 and 2009.
Morrissey adds that "Internet retail has a 19.4% margin, and no one in Congress would dare talk about seizing profits from Amazon (for instance) as “unreasonable,” even though the margin in that industry is almost twice that of oil/gas."
The reality is that this is all about pandering to the environmentalists and the leftists who see oil as evil.
Bruce McQuain of QandO notes:
In fact, it is apparently the periodical publishing sector that the Kucinich cabal should be after – they’re obviously gouging their customers, making a windfall profit of 51.7% for heaven sake. Down with Newsweek! Down with TIME! Down with Ladies Home Journal!
A commenter at The Hill observed:
This is great- now we need a "Reasonable Spending Board" to monitor our Congress. We need a "Reasonable Ethics Board" to punish members of Congress who use their office to enrich themselves. A "Reasonable Taxation Board" to prevent the government from taking too much of our money.
We can have a "Reasonable Earnings Board" to take money from actors and musicians who make too much money on their movies and records. A "Reasonable Athlete Salary Board" to make sure athletes don't make too much money. A "Reasonable Executive Compensation Board" to make sure people like Franklin Raines don't make hundreds of millions while bankrupting taxpayer funded companies.
We have truly entered the twilight zone and Orwell must be spinning in his grave. The day the government gets to decide what a "reasonable profit" is for private companies we have allowed our politicians and federal government to become far too powerful.
"Yes, let’s have the body that can’t even produce a balanced budget make determinations about 'reasonable profit,'" Morrissey concludes.
This is exactly why Rush Limbaugh said we should get rid of every liberal in government.
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