Dennis Kucinich (D-OH) has introduced into the House of Representatives HR 3784, the Gas Price Spike Act of 2012. Lest he not be the only one associated with this lovely piece of legislation, he has been joined by his co-sponsors John Conyers (D-MI), Bob Filner (D-CA), Marcia Fudge (D-OH), James Langevin (D-OH), and Lynn Woolsey (D-CA).
I need to be fair to these representatives. Let's look at where their districts are.
- Kucinich (West Cleveland and near western suburbs)
- Conyers (downriver suburbs of Detroit)
- Filner (far southern California on the borders of Mexico and Arizona)
- Fudge (Cleveland and its near eastern suburbs)
- Langevin (most of Rhode Island except for Providence)
- Woolsey (area north of Oakland and most of Sonoma county)
These are pretty liberal areas, so these representatives may be doing a good job of serving their constituencies. But, that is the extent of the faint praise they will get from me.
Here is a summary of the way the bill would work if it were to become law.
- The President would appoint a 3-member Reasonable Profits Board (RPB), not subject to Congressional approval.
- The RPB would determine what constitutes reasonable profits for the sale of crude oil, natural gas, or other taxable product (fuel which is the product of natural gas or crude oil).
- To the extent that profits on said sale exceed the reasonable amount by less than 2%, an excise tax of 50% on such unreasonable amount would be imposed.
- To the extent that profits on said sale exceed the reasonable amount by 2%-5%, an excise tax on such unreasonable amount of 75% would be imposed.
- To the extent that profits on said sale exceed the reasonable amount by at least 5%, an excise tax on such unreasonable amount of 100% would be imposed.
- These excise taxes would allow for tax credits for fuel-efficient vehicles and to allow grants for mass transit.
Let's see. We have an anti-trust act which prohibits monopolies and price-fixing. It has been used when appropriate. Oil company profit margins are less than they were (in total) 30 years ago. I thought we lived in a free enterprise type society.
What comes next? Do we get a similar tax on pharmaceuticals? The companies that make them are generally judged to be pretty evil. How about cosmetic companies? They have high profit margins.
In my opinion, this is a bad idea with a very slippery slope to go with it.
Thankfully, this one won't pass, but I still felt the need to write about it.