Archive for April 2011
With gasoline prices at the pump approaching all time highs, even inflation adjusted highs, President Obama has just the solution: Higher taxes!
Amid rising gasoline prices at the pump, President Barack Obama urged congressional leaders Tuesday to take steps to repeal oil industry tax breaks, reiterating a call he made in his 2012 budget proposal earlier this year.
Hmm, lets see… make a company’s expenses in the course of business rise, and that is going to make their product cheaper, right?
The White House conceded his plan would do nothing in the short term to lower gas prices.
Oh. Well, so much for that. At least they didn’t try to convince us that it would help, so maybe they are starting to learn.
Now, for the record, I’m actually not against this, at least in theory. I do not think one industry, business, or entity should get any special tax consideration over another. Cities and States use this tactic all the time, however, when it comes to attracting new companies, through tax-increment financing, special laws written just to bring in or retain a certain company with extensive tax breaks. This needs to stop.
When the government, be it Federal, State, or Local, starts to give special deals to one, they are essentially choosing winners and losers in the economy. It would actually be funny, if it wasn’t so serious; the Democrats scream and throw a tantrum any time any sort of tax reductions are even proposed, but when an industry like Ford hints they may move a factory from one state to another, even the Democrat lawmakers in that state fall all over themselves to promise the moon (with no taxes!) in order to keep them there. So while they want to stick it to Big-Whatever on the campaign trail, they know it wouldn’t work, at least not if said politician wants a chance at reelection.
The thing with gasoline is that 18 and some odd cents of every gallon you pump into your car goes to the Federal government, and anywhere from 15 cents or so, up to around 75 cents (if I recall correctly, depending on the state) goes to the state coffers. What is not known or quantified, is how much has to be added to each gallon in order for Exxon or Shell to pay the corporate taxes.
There are so many levels of taxation on businesses that it’s nearly impossible to keep it straight. Heck, I have an extremely small business (with me being the only employee), and I really need the accountant I have to keep it all straight. I couldn’t even imagine how it would work for a multi-billion dollar company, with hundreds or even thousands of employees. But at the end of the day, every single product every company sells must factor all those taxes into the price of said product, the labor costs to produce it (and don’t forget the forced FICA contributions every employer must pay for every employee), etc. All that must be covered.
So while I am in complete favor of having no special carve-outs for any single industry, this is not the right time to add even more complication and dollar amounts to the oil industry. Once we get past this price spike, which I think we will, then I would be more than willing and open to the idea of at least phasing them out.
Now there is a bit of twist here, though; one major customer of the oil companies is the United States Government. It takes a lot of jet fuel, diesel, gasoline, and other fuels to keep the military going with fighters, bombers, tanks, ships, as well as Air Force One, the Presidential Limo, not to mention all the fleet cars used by everyone from Senators all the way down to lowly bureaucrats doing field work. The petroleum industry does provide goods, products, and services that are without doubt vital to our national security. So that has to be taken into consideration when having these debates and discussions.
However, if I were Mister Exxon, and saw every day that the Leader of the Free World took every opportunity to bash my industry and company, I think I would be sorely tempted to throw the switch, bring the entire line to a screeching halt, refuse to drill, ship, refine, or deliver a single drop of gasoline for at least a week. Wonder what that might do to gas prices?
Who is John Galt?
For everyone who is worried about the gasoline prices we are all paying now, help is coming: President Obama is on the case!
President Barack Obama announced Thursday that the Justice Department is assembling a team to “root out any cases of fraud or manipulation” in oil markets that might be contributing to $4 a gallon-plus gasoline prices.
Well, that’s certainly a relief, isn’t it?
On the plus side, he won’t have to look very far. Won’t even have to leave home. While commodities markets are quite complicated, they do still function on the principles of supply and demand. The lower the supply, and/or the higher the demand, the higher the price climbs. And this administration still refuses to allow resumption of deepwater drilling in the Gulf of Mexico.
To be fair, that isn’t the only thing that is affecting it. Summer driving season is upon us, which means more demand. There is unrest and full-out conflict in several oil-producing nations, which at least threatens to affect the supply. And, China and India continue to expand their automotive fleets, further pressuring the demand side.
And, there is the speculation market. Traders make bets by purchasing and selling units of future production. This can be, and sometimes is, subject to crooked manipulation, but only in the short term. If a speculative bubble gets blown up without the underlying economic conditions to support it, the prices would quickly come back down. I suspect that these Evil Speculators are who the President has in mind to make out to be the bad guy in this scenario. There’s always a Bad Guy for Obama to demonize and go after, isn’t there?
The “Green” movement has pretty much stopped any expansion of our domestic production, both drilling and refining. This has to change, unless we want to pay higher and higher prices for gasoline and diesel, which are already rippling through the entire economy driving the costs of everything.
Folks, windmills and golf cart-cars are not going to solve this problem. We need more production, more drilling, and yes, people need to conserve. As far as it goes, I don’t have a problem if someone wants an electric car. Perhaps they live close to their work to make it effective. For most of us, however, they are not practical. But we can make sure we are driving within the posted speed limits, keeping up proper maintenance, and driving easy to get as much miles per gallon as possible. That alone, however, is not enough.
Back in the Bush administration, they tried hard to open up the ANWR area in Alaska for drilling. Many fought tooth and nail to stop that, citing “trashing the environment,” there was a very small amount there and not worth it (claims I’ve seen widely disputed), and after all, it would take ten years before a drop of oil came out of the ground.
Guess what? That was about 10 years ago. If we’d gotten off our duffs back then and started the process, we would now be, or would soon be, using that crude to add to the world supply. Which would be putting at least some downward pressure on the prices.
So congratulations, Mr. President, looks like you are getting what you wanted: for energy prices to “necessarily skyrocket.” Hope you enjoy your one term.
From the Washington Times, President Obama seems to have a firm grasp on just what is needed to help the Government get a handle on the crushing debt we have accumulated: “Spending Reductions.”
The president also called for undoing the Bush tax cuts for upper-income taxpayers, and for canceling other tax cuts many of them receive such as the mortgage interest deduction — which he called “spending reductions in the tax code.”
Get that? “Spending Reductions” in the tax code actually means increasing taxes. Just like any good Liberal would do.
If one has been paying any attention at all to the debate, and the semantics involved, for the last decade or so, this shouldn’t actually come as a surprise. After all, they still scream and yell about Tax Cuts For The Rich That Weren’t Paid For.
That sort of language tends to get into the part of the population that pays half-attention to the political world. On the surface, it sort of makes sense, I mean, you can’t reduce your income without cutting out something (paying for it), after all, right?
The problem, however, is that it also reinforces the notion that the Federal Government is Mother, Father, and All Things To All, and how dare you try to take away their money. Everything belongs to the government, and what you get is what they allow you to keep for yourself, for the good of everyone else.
Here’s the thing: We DO have a serious budget problem, and Paul Ryan’s proposals only begin to address those problems. Don’t get me started on the bogus $38 Billion they just agreed to “cut.”
The biggest issue I believe is the fact that no one can even understand the numbers we need to address. I mean, I know what $100K is, roughly a house, if you shop around. I can picture a million or so. But once we get over that seven figures, it’s almost abstract. We don’t even grasp the concept of how much it is, how large a number it is.
People go bonkers when they learn they paid $5 Service Fee to use the ATM at the mall. But the same people’s eyes glaze over when the talking heads start throwing out “They cut $38 Billion from the budget.” “$4.6 Trillion (over 10 years, whatever that means).” Most of us simply do not understand the concept.
And on top of the confusion, Obama and the Democrats are going to start yelling from the rooftops about “Spending Reductions” in the tax code, which you will now know is simply how they are going to say “Raise Taxes” in hopes that you don’t know what it means.
We need to get serious about this, and get serious right now. Every single dollar that is spent by the government needs to be examined and questioned. Nothing should be left out of those considerations, not even Defense. Of course, we can’t leave our nation and the military vulnerable, or hurt the pay of military members, but there must be redundant capabilities, obsolete and unused programs still being funded, and the like that must be examined and trimmed as needed.
Until we get serious about this, we will keep hurtling towards that cliff of bankruptcy. And Obama seems insistent on stomping the throttle to get there.
Just as I put this up, I find Allahpundit finds the CBO has taken the bogus $38 Billion in “cuts” and rendered them completely laughable. Really, guys? You pushed it to the brink, fighting and clawing, for a less than a rounding error?
In recent weeks, New York gazillionaire Donald Trump has been getting lots of press, appearances, speculation, columns and internet attention on the idea that he might be gearing up to run for the Republican nomination for President.
He might be serious; on the other hand, he might just be after attention. After all, his TV Show “Celebrity Apprentice” is in the middle of its run right now, and as they say, there’s no such thing as bad publicity. Either way, he is causing a buzz.
One of the many things he keeps bringing up the Obama “Birth Certificate” story; for those that have been living under a rock, it has to do with the idea that Barack Obama may have been born someplace other than Hawaii and thus not eligible to be President. He claimed he’s got private investigators searching for answers, and they (and he) can’t believe what they’ve found so far.
Now, as far as it goes, do not count me as a “birther.” For my own opinion, his mother was an American Citizen, and if there was anything strange, it would be a technicality. For example, one of the theories claims he may have actually been born in Kenya, and while she was a citizen, she would have had to file certain paperwork upon return to the Unites States, which she supposedly did not do. As a I said, a paperwork technicality.
(And just for the record, I do have suspicions about it, but only at what is there; something ’embarrassing,’ but not disqualifying; for my money, I’m betting that Barack Obama, Sr, may not actually be listed as the father, or something along those lines.)
Now, to be fair to Trump, he is also talking about a lot more than Birther Conspiracies; he is hitting economics, energy production, foreign policy, and general ineptitude of this administration to whoever will give him air time. Too bad all that is lost in the static of the birth certificate nonsense.
Now, I’m not one to tend to jump on the ‘Flavor of the Week’ of potential Presidential nominees. I think we have several good, winning possibilities to run against Obama. Heck, I’m thinking that my nearly blind Beloved Lhasa would give him a good run! But, just for fun, let’s look at Trump.
There are several things that make Donald Trump an attractive possibility. People often think that our Government, especially with the debt and economic factors being what they are, might benefit from being run like a business. And that would be one Trump’s strong points. He’s built an empire, lost it, and rebuilt again.
And while some might wonder exactly where Obama’s loyalties lie in relation to America and the Capitalist system we favor, there can be no doubt that Trump loves America, and loves the capitalist system. Add to that that one does not get to the level of business that Trump has without having at least a clue of how to wheel and deal to get jobs done. And, think about him across the table from some American adversary? I don’t think he’d give away crucial defense secrets in order to get a photo-op handshake.
Bottom line, I actually suspect that Donald Trump is probably playing the news cycle for publicity; on the chance he is serious, I actually don’t think he’d survive too long in the primary process. But, assuming he is serious, and somehow makes it to the nomination, I have to say, I would probably support him.
Well, that’s easy to say; I think I would support anyone on the Republican side, especially against Obama, with (at least) one exception: Should the crazy Representative from Texas Ron Paul somehow end up with the Republican nomination, I would NOT support him, and would likely stay home on election day.
**Update** This morning, I wake up to this: If he doesn’t get the Republican nomination, he would ‘probably’ run as an independent. This is not good; I’m all for anyone who desires and has the means to seek whatever office they choose, but the effect on things this time would be the same as 1992, when Ross Perot split off enough conservative-leaning votes to hand the election to Bill Clinton.