[Guest post by Aaron Worthing; if you have tips, please send them here. Or by Twitter @AaronWorthing.]
I have written before that when it comes to some Democrats and particularly the President, “high gas prices are not an unintended consequence of their policies: it is the means by which they will accomplish their goal.” Their goal is to raise the price of gasoline so that you reduce your consumption of it. So therefore, via Instapundit, we get this New York Times article about how some Democrats plan to raise taxes on the oil industry.
Linking two of the politically volatile issues of the moment, Senate Democrats say they will move forward this week with a plan that would eliminate tax breaks for big oil companies and divert the savings to offset the deficit.
With high gas prices and rising federal deficits in the political spotlight, senior Democrats believe that tying the two together will put pressure on Senate Republicans to support the measure or face a difficult time explaining their opposition to voters whose family budgets are being strained by fuel prices.
President Obama and some top Congressional Democrats have said they want to take some of an estimated $21 billion in savings from ending the tax breaks and steer it to clean energy projects. But the Senate’s Democratic leadership is calculating that using it to cut the deficit instead makes it a tougher issue politically for Republicans who are trying to burnish their conservative fiscal credentials.
“Big Oil certainly doesn’t need the collective money of taxpayers in this country,” said Senator Robert Menendez, Democrat of New Jersey, one of the authors of the legislation that Democrats intend to showcase. “This is as good a time as any in terms of pain at the pump and in revenues needed for deficit reduction.”
As part of the effort to build support for the measure, the Senate Finance Committee has invited multinational oil company executives to discuss the tax subsidies and other government incentives at a hearing on Thursday.
Many Republicans are certain to oppose the proposal, making it hard for Democrats to assemble the 60 votes that will be needed to break a filibuster, given the resistance from energy-state senators in their own ranks. Republicans have characterized calls by Mr. Obama and Congressional Democrats to end the breaks as backdoor tax increases that will only increase gas prices.
“Instead of returning again and again to tax hikes that increase consumers’ costs, the administration and its Democrat allies in Congress should open their eyes to the vast energy resources we have right here at home and to the hundreds of thousands of jobs that opening them up could create,” Senator Mitch McConnell of Kentucky, the Republican leader, said in a statement.
Don’t tell me that the Democrats are too stupid to know that these taxes will be passed on to consumer. Let’s remember how they pitch cigarette taxes: as a means of increasing the price of cigarettes and thus reducing smoking. To quote Bill Clinton: “One of the surest ways of reducing youth smoking is to increase the price of cigarettes.” This is economics 101.
So they know what will happen. They know that their plan will increase the cost of gasoline at the pump. Some people are radical enough in their environmentalism that they will actually want this as a result. But they are also betting on a good chunk of the American people being too stupid to understand that if you increase costs to gas companies, they will pass those costs on to you.
Now, personally I don’t like subsidies and special tax breaks generally, and would like to see a radical ending of such policies across the board. But the Democrats aren’t advocating that, and I will be damned if they are going to single out this industry and make the price of gasoline, and only gasoline, go higher.
And the claim that it will reduce the deficit is bull, too. First, if gas consumption is reduced, then you have to factor in those reduced profits for the oil companies when calculating tax revenues. Second, high gas prices are an economy killer, so even if there is some modest increase in tax income from that tax hike in general, the drag on the economy will mean reduced taxes in other areas. Again, they are depending on you being too stupid to see through all of this.
The only good news is we learn via the Washington Post (H/T: Hot Air) that gas prices might be going down this summer, by about 50 cents. Which is about $2.50 than I would like, but I’ll take what I can get.
Still when you watch in horror each time you fill the pump remember this: some Democrats want you to feel this way and they have new proposals to make things even worse.
Update: Boston Herald predicts a $0.75 drop in gas prices?
[Posted and authored by Aaron Worthing.]