"If at age 20 you are a conservative then you have no heart. If at age 30 you are a liberal then you have no brains."
Sir Winston Churchill

Obama obviously knows very little about economics, specifically that "Society stagnates when independent productive achievers begin to be socially demonized and even punished for their accomplishments." This dilemma fogs Obama's reality. To him, accepting this truth is a "false choice", his answer to things he doesn't understand. And by the way... where is John Galt?

Wednesday, April 27, 2011

Should Oil Companies Pay More Taxes

I think every reasonable person wants big business to pay taxes (most pay no tax on profits) but we also have to be prepared for the consequences (it's happened before). The fly in the ointment is the depletion allowance tax credit. A producer only has a finite amount of oil in their reserve and in order to pump it out when the incentive is low, the gov't. gives them a tax credit for each barrel that is removed or "depleted" from the oil bed. The price of oil/gas will skyrocket as American producers slow down or stop producing in order to keep their same profit (less oil means higher gas prices as they try to maintain that profit). Additionally, the position of our government is not to find more of our own oil.; more of our dollars will end up in Saudia Arabia, Mexico, Venezuela and Brazil instead of here. Remember, we can't force American producers to pump more oil for less money. So, again we see the "buzz-word generation" urging action on something they know nothing about. What will you do if, like many experts think, the price of gas goes to $6/gal. this summer? It's estimated that living in the suburbs and driving to work and back will cost $60-$80 per week, eliminating everything except food, gas and taxes for most low and middle earners. Remember, this has happened before, and the results can readily be projected. The more government interferes with business, the more it costs each of us. Additionally, these companies pay several other taxes, like the Job and Family Services tax that is based on their employee's salaries; they pay half of the social security and medicare taxes... and there are other, larger state and local taxes. Tax collections will decrease when these companies make less profit and employ fewer people causing us to fill the gap with our own higher taxes or fewer benefits. This "simple" tax problem is so complicated that adding more parameters to the equation will certainly have many undiscovered consequenses. The philosophy of Ayn Rand is starting to play out for everyone to see, and very few to understand, I'm afraid. We're tiny, minuscule gogs in this wheel. Where is John Galt?