Another Attempted Tax Increase

Republicans in the U.S. Senate yesterday blocked a series of new taxes on big oil companies that would have paid for planned tax breaks for renewable energy development. The really scary part is that Democrats came dangerously close to getting the package to the floor, falling only three votes short.

Now, don't get me wrong here. I'm all for exploring possible alternative sources of energy if, and only if, it can be done responsibly. Imposing new taxes on the major oil companies in America, though, will only result in decreased research and development efforts, reduced investment in current and future infrastructure, and increased costs to consumers. That means you and me, folks.

The Democrats in the Congress are very good at promoting the nonsense about obscene oil company profits, as if the basic economic laws of supply and demand were simply nonexistent. Oil companies set prices for their products at levels designed to support continued growth, R&D, investment, and returns to investors. If these companies are subjected to new taxes that increase the cost of doing business, they will ultimately pass those costs on to consumers. Of course, some supporters of the tax package dismiss this notion outright, claiming that large profits negate any burden that might be imposed.

It's almost like they think the oil companies will just absorb the increased costs out of the goodness of their hearts, and with complete disregard for their investors. Would you, as an investor in a company, be happy if the board of directors decided to cut your returns so that average consumers were not inconvenienced by higher prices? I didn't think so. After all, they would be taking money out of your pocket to keep others happy.

So what should the Congress do? Here's a crazy idea. How about cutting some of the ridiculous taxes that are currently imposed on gasoline sales in order to provide some relief to the consumer instead of taking measures that will inevitably result in an increased financial hardship for ordinary Americans? Or better yet, how about providing some additional tax BREAKS to the oil companies in exchange for increasing research and development on alternative sources of energy? What a concept! Let corporations and consumers keep more of their own money instead of constantly barraging them with newer and higher taxes.

I know, that's silly talk, isn't it? The reality is that too many in the congress think that they know better than you do when it comes to spending your money. And that mentality is likely to only get worse under the current crop on Capitol Hill.