Thursday, June 12, 2008

Stuck on Stupid

Ever notice that for some politicians, their first and only "solution" to any problem is to increase taxes? And after 100 years of that, they still have not learned that higher taxes is never a good, permanent solution to anything. Government can never use our money as wisely as we can, and when they take it from us, we have less to invest in the future, in business, and in our families.

Take the bill in the Senate that would have put a Windfall Profits Tax on oil company profits. Sure, to the short-sighted, that sounds great - the oil companies can afford it, and they deserve it. But the thinking man first remembers that every Windfall Profits Tax of the past has failed miserably. We did it in the '70's, under Carter, and it resulted in shorter supplies and higher prices. Is that really a solution? Is that what we really want?

The reason WF Taxes don't work is simple economics. If you place more taxes on business, the business will simply increase the price to the consumer, to cover the tax. And they will not invest as much into research, or refining. The tobacco companies did that sort of thing when they got sued and had to pay out many millions. They simply passed the cost onto you and me (well, not me - I don't smoke). More taxes are not the solution.

It never ceases to amaze me that many good folks simply cannot grasp this simple concept: if you increase the cost of doing business, the cost of products and services must increase. Even a kid running a lemonade stand understands that if the cost of lemons increase, he must increase the cost of his lemonade. And if the local bully extorts 20 percent from him in a "protection racket", the kid must charge 20% more to cover those losses. And since we are all consumers, we are the ones who ultimately pay for higher taxes on businesses.

The solution is four-fold: first, the governments - state and federal - must be made to stop taxing fuel by the dollar, and tax it by the gallon, instead. As it is, every time the cost goes up, the amount we pay in tax also goes up. But if the tax was per gallon, it would not increase just because the price goes up. The ones who are earning a "profit windfall" are the governments.

Second, oil must be removed from the commodities market, and regulated as any other necessary utility. If day traders cannot keep bidding up the futures prices, the cost per barrel will drop like a rock.

Third, the government should pass legislation that would permit us to tap our own natural resources, as a temporary measure, until a new energy source can be found or created. Many people simply do not realize that in the last few years, China and India - both with populations that far exceed our own - have begun using oil in the same quantities (or greater) than America does. This has tripled demand - while supply has remained stagnant. The simple law of "supply and demand" dictates the price increases accordingly. If we cannot decrease demand, then we absolutely must increase supply.

Finally, the government should offer a $100 million dollar reward to any person or company that develops a viable, sustainable source of energy that can replace oil, and is either carbon neutral, or at least greener than fossil fuels. That reward is small compared to what it will cost us if such a source is not developed. The reward would spur ingenuity, and get companies investing in a renewable source. As an example, when a $10 million dollar prize was offered to the first person to put a man into space and land him safely, it spurred many into finding ways to do it, and it was accomplished within 2 years.

But the politicians who see taxation as the only solution are bad for us, bad for our economy, and do not offer any viable answers. It's time to replace them with people who can see beyond their noses. The republicans who shot down that dangerous "band-aid" solution did a fine and courageous thing. Courageous because many people will not see them as visionaries, but as obstructionists. But it's like the Bible says - the righteous will always be persecuted.

Not that those republican Senators are righteous. But in this case, they did manage to do the right thing, for the right reasons. And, since the bill would have forced all businesses to pay a total of an extra trillion a year to buy "carbon credits", they also prevented having businesses pull up stakes and move to China and India, where there are no such restrictions. If you owned a big business and were told to pay a huge amount for credits, and you realized you could save billions by moving to China, you'd be gone in a flash - and take all those American jobs with you. Not good! So, though it looks like obstructionism, in this case the Republicans did a very good and sane thing.

Now if only Congress will do the four things listed above, we could all rest a lot easier.

I really do not care if Republicans or Democrats hold Congress. I only care that whoever we elect, that they actually have some intelligence, common sense, and remember that they work for us, and not vice versa. They need to accomplish the tasks the people want them to deal with - immigration, health, jobs, national security etc. But in the 2 years the Democrats have held BOTH HOUSES of Congress, they have not accomplished anything at all. And the Republicans before them were not that much better (though they did get SOME things done).

It is time we sent politicians a message - do the job, or get replaced. If you are interested in discovering actual solutions, so you can elect people who will pursue them, check out and look over their platform, formulated by asking average Americans what they want our leaders to do. If you agree with more than half of the platform, consider "signing" their petition to have it presented at both national conventions this year.

It's a start.

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