Friday, January 20, 2012

Nitwitery Alert: House Democrats Are Proposing The Gas Spike Act and a "Reasonable Profits Board"

How about Congress establishes the"Reasonable Deficits Board" and gets that to work first?
 THE HILL -- "Six House Democrats, led by Rep. Dennis Kucinich (D-Ohio), want to set up a "Reasonable Profits Board" to control gas profits. The Democrats, worried about higher gas prices, want to set up a board that would apply a "windfall profit tax" as high as 100 percent on the sale of oil and gas, according to their legislation. The bill provides no specific guidance for how the board would determine what constitutes a reasonable profit. 

The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale of oil and 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."

Here's how the bill starts:  "To amend the Internal Revenue Code of 1986 to impose a windfall profit tax on oil and natural gas (and products thereof) and to allow an income tax credit for purchases of fuel-efficient passenger vehicles, and to allow grants for mass transit." 

MP: Just wondering, now that natural gas prices have spiked so low (see chart above) that some producers aren't even covering their costs of production, shouldn't there be a "windfall losses subsidy" for the natural gas producers that are losing money as part of the "Gas Spike Act."  That is, market prices "spike" in both directions, up and down, so shouldn't there be some provision for downward spikes?

HT: Bob Wright

Update: According to the most recent rankings from YahooFinance!, the average profit margin for the 215 different American industries is 7.8% for the most recent quarter, and the profit margin for the "Major Integrated Oil and Gas industry" (includes ExxonMobil, Shell, BP, etc.) is right about average at 7.9%, and it ranks #90 out of 215 industries.  So if the profits of the major oil companies are "unreasonable," what about the other 89 industries that are even more profitable, like publishing (53% profit margin), silver (41%), gold (25%), cigarettes (22.5%), etc.?

HT: Morganovich (see comments)

Update from some responses to me on Twitter:

"How about they get the "Reasonable Deficits Board" to work first?"  

"I'll accept a "Reasonable Profits Board" when they accept a "Reasonable Income Board" for all public employees."

32 Comments:

At 1/20/2012 3:27 PM, Blogger morganovich said...

as i said on the last thread, S+P 500 average net margins are 8.9%.

XOM's are 8%.

so, unless the purpose of this board is to increase profits for the oil companies so they reach the average of big us firms, it's pretty difficult to see what their argument is going to be.

 
At 1/20/2012 4:17 PM, Blogger Jon Murphy said...

Many restaurants have profit margins over 30% (at least the chains do).

 
At 1/20/2012 4:41 PM, Blogger Paul said...

Wonder which non-sequitur Benji will chime in on this one. I'm guessing either Iraq or ethanol.

 
At 1/20/2012 4:49 PM, Blogger Che is dead said...

"Guess what this liberal would be all about ...?"

They're determined to impose those "reasonable profits" one way or another.

 
At 1/20/2012 4:49 PM, Blogger Jon Murphy said...

Here's another thing: these oil companies have these profit margins after getting sweetheart deals and subsidies from the government. Take those out, and what's the margin then?

 
At 1/20/2012 5:17 PM, Blogger Benjamin said...

What a stupid idea---Reasonable Profits.

Is there another party we can vote for?

The GOP gets us into Iragistan with a $4 trillion price tag, and no upside.

The Dumbocrats want to regulate profits (necessary to spur investment, btw).

I wish Dr. Perry would run for President. I would vote for him.

 
At 1/20/2012 5:19 PM, Blogger Jon Murphy said...

Is there another party we can vote for?

You bet there is: Libertarian. I'm a Libertarian and damn proud of it.

 
At 1/20/2012 5:22 PM, Blogger juandos said...

"these oil companies have these profit margins after getting sweetheart deals and subsidies from the government"...

What are these alledged sweetheart deals murphy?

A return of 6.7 cents per dollar of sales doesn't sound all that sweet to me or am I missing something regardless of the alledged deal?

 
At 1/20/2012 5:27 PM, Blogger juandos said...

"The GOP gets us into Iragistan with a $4 trillion price tag, and no upside"...

Hey pseudo benny have you ever considered renting billboard space along a well used road way so you can proclaim to the community at large that you don't have a clue and are seemingly proud of it?

Repeating the lie won't make it magically morph into a fact...

 
At 1/20/2012 5:37 PM, Blogger PeakTrader said...

Juandos, yes, it's a waste to maintain a huge military without putting it to good use.

 
At 1/20/2012 5:49 PM, Blogger Larry G said...

not sure what the point of the legislation might be since it goes no where in the House, right?

 
At 1/20/2012 6:21 PM, Blogger juandos said...

"it's a waste to maintain a huge military without putting it to good use"...

Interesting comment pt, one can easily imagine it might mean so many different things...

 
At 1/20/2012 7:07 PM, Blogger Jon Murphy said...

Juandos:

http://articles.cnn.com/2011-05-17/politics/senate.oil.subsidies_1_oil-companies-gas-prices-maine-s-olympia-snowe?_s=PM:POLITICS

http://en.wikipedia.org/wiki/Energy_subsidies

Don't forget the ethanol subsides

 
At 1/20/2012 7:08 PM, Blogger Buddy R Pacifico said...

Dennis Kucinich is also the co-sponsor of H.R. 3018.

H.R. 3018 would:

" In General- In the case of a domestic corporation for any taxable year beginning during 2011 or 2012, there is hereby imposed (in addition to any other tax imposed by this part) a tax equal to 40 percent of the excess (if any) of--

‘(1) the retained earnings of such corporation for such taxable year...
"


Que the Twilight Zone music:

The title of the bill is " Corporate Assets Should be used to Hire Act".

 
At 1/20/2012 8:16 PM, Blogger Che is dead said...

"yes, it's a waste to maintain a huge military without putting it to good use." -- PT

Speaking of nitwitery, the purpose of a large well equipped and trained military is as much to prevent war through deterrent as to fight one should the need arise. So, you see, a "huge military" is always being put to good use.

"Si vis pacem, para bellum"

 
At 1/20/2012 8:20 PM, Blogger Jon Murphy said...

So, you see, a "huge military" is always being put to good use.

I'm not sure I agree, Che. The military is trained for war, not for peace. Soldiers are trained to fight. When no one is there to fight, soldiers get board. When soldiers get board, they launch coups.

 
At 1/20/2012 8:26 PM, Blogger Che is dead said...

The White House's hostility toward fossil fuels seems to know no bounds. Exxon has made some of the largest oil finds in a decade, in the Gulf of Mexico, and yet the Obama administration is holding up the leases and permitting process. In North Dakota, an Obama-appointed U.S attorney has brought criminal charges against seven oil companies (with penalties of up to six months in prison) for causing the deaths of 28 migratory birds found in oil waste pits.

According to data from the Federal Reserve Board's Industrial Production Indexes, the oil and gas industry, which the Obama Energy Department loathes, has had more growth in output than any other manufacturing industry in the U.S. from 2005 through 2011. As a reward, the administration is proposing $35 billion in new taxes on the industry to slow it down. Even if we accept the dubious White House claim that all the oil and gas tax write-offs are unwarranted loopholes, a 2011 Congressional Research Service study finds that per unit of electricity produced, for every two cents of tax subsidy to Big Oil, Big Green (wind and solar) get closer to $1 in handouts. ...

So we now have a national energy policy directing our resources away from cheap, efficient and increasingly abundant fuels like coal, oil and natural gas while we channel billions of tax dollars to 500-year-old energy technologies like wind power that can't possibly scale up to power a modern-day industrial economy. -- WSJ


Of course, leftists and their projects are "special" - just ask them. So, we have to change the laws whenever necessary to accommodate their morally superior agendas:


The federal government is proposing to grant a first-of-its-kind permit that would allow the developer of a central Oregon wind-power project to legally kill golden eagles ... It’s the first eagle “take permit” application to be received and acted on by U.S. Fish and Wildlife under the Bald and Golden Eagle Protection Act. (“Take” means to kill, harass or disturb the birds, their nests or their eggs.) -- USNews

 
At 1/20/2012 8:33 PM, Blogger Che is dead said...

Why Oil & Gas Tax Treatments Are Not Unique or "Subsidies"

 
At 1/20/2012 8:36 PM, Blogger Che is dead said...

Obama Rails Against Oil Subsidies, Gave ACORN $3 Billion in Stimulus

 
At 1/20/2012 8:44 PM, Blogger The Roller said...

Many fine points in this article, Prof Perry, but the one key that stands out above all else is,

Democrats.

Ah ha ha ha ha ha!

 
At 1/20/2012 8:47 PM, Blogger Che is dead said...

Windmill windfalls. Just last year, the Treasury Department announced a $93 million grant for a wind farm owned by Berkshire Hathaway, the company run by Warren Buffett, one of the richest men in America.

Another $115 million in wind subsidies went to First Wind, a company backed by the D.E. Shaw Group, the hedge fund that paid Lawrence Summers $5.2 million a year for a one-day-a-week job before Summers became a top economic aide to President Obama.

The stimulus passed by Congress last year included $8 billion in subsidies for high-speed rail. Buffett's Berkshire Hathaway, which already owned some of the Burlington Northern Santa Fe railroad, promptly bought the rest, nicely positioning the billionaire for a stimulus of his own.

Tesla, an electric car company whose investors include billionaire Google co-founders Sergey Brin and Larry Page as well as Hyatt hotel heir Nick Pritzker [all of them big Obama campaign donors], got a $465 million government loan. And Fisker, another electric car company, whose investors include the oil-rich emirate of Qatar, got a $529 million government loan. -- NY Daily News


You see, if you want to steal from the taxpayers it's best to be a leftist. That way fellow travelers, like "Benji", will either look the other way or actively try to deflect any criticism by blathering incoherently about the military or "Iraqistan".

 
At 1/20/2012 8:56 PM, Blogger sethstorm said...


The title of the bill is " Corporate Assets Should be used to Hire Act".

That should be the title of a bill that kills all guest worker programs while encouraging businesses to train & hire instead of complain & contract.

 
At 1/20/2012 9:10 PM, Blogger jorod said...

I want a "Board to Prevent the Proliferation of Idiots in Congress."

 
At 1/20/2012 9:12 PM, Blogger VangelV said...

Why does this proposal remind me of Kip Chalmers, Wesley Mouch, Tinky Holloway and Paul Larkin?

 
At 1/20/2012 9:18 PM, Blogger Larry G said...

" I want a "Board to Prevent the Proliferation of Idiots in Congress.""

they're called elections.

and if the facts here represent the actual.. there's going to be even less Democrats in Congress, eh?

 
At 1/20/2012 9:27 PM, Blogger VangelV said...

they're called elections.

and if the facts here represent the actual.. there's going to be even less Democrats in Congress, eh?


Only a fool thinks that there is a big difference between the Democratic and Republican parties. The elections may change which party is in charge but that does not mean that there will be a major change in the way the country is governed. No candidate on either side other than Ron Paul has proposed a cut in spending. That means that the USD is going to have its share of problems once the weakness of the Euro is no longer a distraction from the Fed and Treasury activities.

 
At 1/20/2012 9:27 PM, Blogger Hans said...

G-grouping
O-oil
U-under
G-government
E-enforcement

The Gouge Act of 2012

 
At 1/20/2012 9:28 PM, Blogger Hans said...

G-grouping
O-oil
U-under
G-government
E-enforcement

The Gouge Act of 2012

 
At 1/20/2012 9:46 PM, Blogger W.E. Heasley said...

The Dennis Kucinich pledge:


“Politico dupery, under politico nitwitery, and in government mysticism we trust”

 
At 1/21/2012 5:17 PM, Blogger juandos said...

jon murphy you got to do real homework and give wikipropaganda a pass...

CNN and Olympia Snowe is the basic recipe for misinformmation...

Look at it from the oil side because whatever new expense government lays on them will end up at the gas pump...

 
At 1/21/2012 5:42 PM, Blogger Jon Murphy said...

Juandos, rather than attacking me or the sources I happen to choose, why not present an opposing piece of evidence?

I'm sorry you're pissed the government gives subsides to oil companies, but it happens.

But, one more piece of evidence: http://www.learnliberty.org/videos/story-broke-response

 
At 1/22/2012 2:15 PM, Blogger juandos said...

"I'm sorry you're pissed the government gives subsides to oil companies, but it happens"...

Ahhh jon murphy your painfully obvious inability to read and comprehend are the problems here...

Ask yourself, "how much more of my personal wealth do I want to spend on all products and services derived from crude oil and natural gas?"...

That's all it comes down to and your sources like yourself have apparently not addressed that question either...

Sadly Prof. Art Carden hasn't done his homework regarding the supposed subsidies and the energy industry...

If you get the chance maybe you should e-mail Carden and ask him if he thinks getting rid of the government subsidy to homeowners is a good idea...

 

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