The “Reasonable Profit Board?”

Just when you think Congressional Dems can’t get any loonier (Maxine Waters and nationalizing oil), they kick it up a notch.

From the guy who yesterday was featured essentially saying, “hey, we lied, but you were dumb enough to buy into it“, PA’s own Paul Kanjorsk, we get this little beauty. From the Tax Policy blog:

The current high price of gas has led to a lot of crazy proposals from gas tax holidays to creating a tax deduction based upon energy consumption. But Rep. Paul Kanjorski’s (D-PA) may top them all in terms of its stupidity. From the Times Leader, Kanjorski’s plan would do the following:

– H.R. 5800 would tax industries’ windfall profits.

– The bill would set up a Reasonable Profits Board to determine when these companies’ profits are in excess, and then tax them on those windfall profits.

– As oil and gas companies’ windfall profits increase, so would the tax rate for those companies.

– Kanjorski said his legislation will encourage oil companies to lower prices to prevent them from receiving higher tax rates.

Government would decide what is or isn’t a “reasonable profit?”

And, as is obvious, economics was not a Kanjorski strong suit in school. As the Tax Policy Blog puts it:

While Hillary Clinton may have failed ECON 101 along with John McCain, it appears as if Kanjorski may been enrolled in Marxism 450 at the time. In all honesty, nationalization of the oil industry (i.e. Venezuela) may be better than Kanjorski’s ridiculous proposal.

By “better”, they mean in a lesser of two very big evils sort of “better”.

One can make a case for taxing that portion of the return to capital that comes from economic rents, but Kanjorski has probably never even heard the term. An economist who backed such a tax would understand that such a tax is not going to lead to lower prices at the pump, just as economists are setting the record straight on the current gas tax holiday gimmick. Furthermore, the justification for taxing economic rents would apply to all sectors, not just petroleum.

Remember, it would be the “Resonable Profits Board” – not the “Resonable Oil Profits Board” if you get my meaning. How much does Bill Clinton make per speech? And how is more than a few thou a “reasonable profit?” I mean come on, he’s not that good of a speaker.

(HT: Nealz Newz)
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First published at QandO.

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