No matter how bleak things are looking for Americans, you can always bet there is a Democrat somewhere asking themselves what they can do to here make a name for themselves, how to help the government profit from the situation, or what will get them reelected.
Sen. Sheldon Whitehouse (D-RI), and Rep. Ro Khanna, (D-CA) found a way to hit the trifecta. At a joint press conference on June 15th, the dynamic duo introduced themselves to a group of reporters and the US at large.
They wanted to ensure this new bill was stuck in the minds of voters everywhere as the 2022 midterms rapidly approach. If passed the government will certainly be making a buck on it and given the history of voting by democrats in their area, reelection is not off the table. Called the Big Oil Windfall Profits Tax (real special name there), they believe since US oil producers follow the pricing model from OPEC and not on an open US market that this was a fair idea.
A tax would be levied on companies that imported or extracted more than 300,000 barrels of crude oil in 2019 or the current quarter. With a very complicated and undisclosed formula, they would pin the price of a barrel of crude to the current calendar quarter and the average price in 2015-2019 per the Brent Index.
Claiming the taxpayers would see funds based on the idea of oil staying about $120 a barrel, a single filer making no more than $75,000 a year would receive $240. Those filing jointly while earning less than $150,000 would receive $360 annually.
It was what they each said that was the most impressive though. The idea on its own merits certainly left an impression, but probably not the one they wanted to make. Could the oil giants pay for this? Sure. Will it improve pricing at the pump? Not a prayer. Yet somehow the statements were far beyond anything we could have expected.
Rep Khanna believes “the industry is making record profits during a national emergency” and that “this will put more money into the pockets of the working class.” Money that in turn will be spent on the gas that is now going to cost a national average of $6.75 a gallon with this kind of tax being levied. Then again, that’s about the same price his constituents are already paying.
Sen. Whitehouse’s comments were just as impressive. Showing just how little he understands about the oil industry, or supply and demand, he spouted off that “drilling isn’t going to solve the problem.” He couldn’t stop himself there though. He also went after the oil industry’s price model. “They don’t operate in a real market. They chose to follow the cartel price rather than do market-based pricing.”
These men do not understand the first damn thing about the oil industry, how oil is extracted from the ground, how pricing is set, and how conditions change for extracting the oil from country to country. Additionally, they conveniently forget just how out of whack their pricing can truly get.
Making up taxes like this is a great way to get your name into the papers and on the news. It ensures the American people will remember who you are, what you stood for, and where your allegiance is. None of the answers for the dynamic duo to these questions are positive answers. It does not matter what side of the political spectrum you are on, there is no good explanation for taxing an industry that just passes the cost right on to the consumer. Especially when they add in that cost and a bit more on top to cover the new operating costs of paying for this tax. When do the ignorance and sheer incompetence of the Democrats end?