The disagreement regards the identity of that menacing threat.
John McCain sees the threat as Islamic Jihad, recognizing the importance of winning each battle in the global War on Terror.
B. Hussein Obama and the lame filly Hillary Clinton want to surrender to the terrorists and turn all of our attention to the real threat facing America: oil companies. The tough talk which McCain directs at those who seek to commit horrific acts of mass murder in American cities is reserved for Exxon, whose crime is running a profitable business.
In Sunday’s lovefest with former Clinton press secretary George Stephanopoulos, Hillary sounded like she was preparing a military strike on Exxon.
My longer-term plan is, yes, to put an excess profits tax on the oil companies above a certain level of profit. You see, I really believe we've got to start right now demonstrating a willingness to take on these oil companies. I voted against the big oil giveaway in the 2005 energy bill. My opponent voted for it. I'm on record as taking on the oil companies.Both of the Democrat candidates want to place a “windfall profit tax” on the oil companies because they feel the need to create the perception that they are “doing something” about high gas prices. But instead of addressing the economic conditions driving the price of gas, they resort to demagoguery by conjuring up a villain to blame and meting out punishment on that villain. It’s easier than dealing with the real issues, particularly because revealing the root causes of rising gas prices will show that they themselves are a part of the problem.
The oil companies find oil. They drill for it. They pump it out of the ground. They transport it. They refine it. And they deliver it to the gas station so that we can fill our tanks. They produce a product which keeps our society working. Without them, all economic activity in America would come to a halt in days. For all of that work they make a profit of roughly 16 cents per gallon.
For all their talk of energy independence and reducing our dependence on foreign oil, the government has blocked every option to increase domestic oil production. Congress, under pressure from radical environmentalists, has prevented us from drilling for our vast oil resources in ANWR and along the Gulf Coast, or from building any new refineries for more than thirty years. This leaves us trying to meet 2008-levels of demand with 1970-level production capacity.
The same environmentalists have blocked the construction of nuclear power plants for thirty years, in spite of the fact that we now have the technology to build plants which are safer and much cleaner than coal or natural gas. As a result, our natural gas production is consumed to product electricity, when it could be used more effectively to power mass transit – a shift which would both reduce emissions and alleviate some of the demand for gasoline.
Congress’ most recent meddling involves forcing us to use corn for energy rather than for food. Leftist environmentalists have long searched for ways to drive up the price of gasoline in order to force people to drive less. Ethanol is one of their most successful ploys. A gallon of ethanol costs more and powers a car a shorter distance than a gallon of gasoline, and it is not any friendlier to the environment. But reducing the food supply has driven food prices up around the world. As the price of corn is driven up, the price of milk and beef also increases, because cows eat corn. Transportation costs for every product increase as gas becomes more expensive, and the ripple effect drives inflation across the board.
The Government has made a real mess of the energy and food markets, and what do they get for it? While Exxon profits 16 cents per gallon of gasoline, the average Federal and state tax on a gallon of gas is 47 cents.
Hillary and Obama look at this government-created disaster and come to the conclusion that the solution is to tax the oil companies some more. Hillary is saying “Me too” to McCain’s gas-tax holiday gimmick, but substituting a windfall profit tax "to pay for it". Consumers pay the tax regardless of how it is collected or what name it bears, to this proposal is all smoke and mirrors. Obama is running ads showing him walking through a gas station declaring that he will “tax Exxon Mobile’s $40 billion in excess profits.” This is not even intended to address the problem of insufficient domestic oil production. Instead, the objective is quite clearly to rally the economically illiterate voters who make up the bulk of the Democrat base these days to support “their hero” who will stand up for them against the evil “big oil companies.”
Beyond the demagoguery, what will a “windfall profits tax” actually accomplish? It certainly will not bring gasoline prices down. As a rule, when you tax something you get less of it. Perhaps Obama intends to repeal the laws of economics as he imposes his “windfall profits” tax above and beyond the 35% corporate tax rate which Exxon already pays. To discover the results of such a tax it is not necessary to rely on economic theory alone, because we have real-world data. In 1980 the Carter administration slapped the oil industry with a similar “windfall profits tax”. The Congressional Research Service found in a 1990 analysis that the tax reduced domestic oil production by 3% to 6% and increased oil imports from OPEC by 8% to 16%. If Obama gets his way, oil imports will soar, gas prices will increase even more, and dangerous dictators around the world will increasingly line their pockets with money which may someday buy weapons to use against us. Yet Obama promises to reduce our dependency on foreign oil, which he says costs Americans $800 million a day.
Today Exxon is under fire for buying back $2 billion of its own stock instead of adding that money to the $21 billion it will invest in energy research and oil exploration this year. But if oil companies foresee that their profit from new exploration will be expropriated by government, they will certainly invest less, not more, in new production. The windfall tax kills the incentive for oil companies to produce more oil domestically, a necessary step to reduce our dependence on foreign oil and bring prices down by meeting demand.
Clinton and Obama desperately want to be seen as leaders in establishing a coherent energy policy, but their words and actions are in direct contradiction. They want lower prices but don't want more production to increase supply. They want oil "independence" but they've declared off limits most of the big sources of domestic oil that could replace foreign imports. They want Americans to use less oil to reduce greenhouse gases but they protest higher oil prices that reduce consuption. They want more oil company investment but they want to confiscate the profits from that investment.
Picking the right battles is a key responsibility of the President. We have a choice to make in November. Will we elect a President who sees a vital American industry as the most pressing threat we must confront? Or will we instead choose a man who is committed to defeat the Islamic militants determined to bring mass murder to American cities once again?