House of Representatives Passes a Tax Bill on Oil Companies

Democrats, upset that Americans are paying too much for gas and oil, have decided to……….make sure Americans pay even more for gas and oil.

For the purpose of this post I am going to set aside the fact that the United States government has no business regulating how much of a profit a private business is allowed to make. I am also going to set aside the fact that a growing number of people think government intrusion into private businesses is okay. This goes beyond profits, and into government intrusion into such things as whether a private business can allow smoking. But, as I said, I am going to set that aside for the purpose of talking about a little business 101.

The United States House of Representatives recently passed legislation that would raise taxes on oil companies. Big, bad oil companies. There is only one problem with raising taxes on oil companies, who do you think will pay the price for this? You and I. When the price of doing business goes up, whether it is the price of material, labor, overhead, or anything else, the price of the product has to be raised in order for a company to maintain a profit margin.

Part of the price of doing business is how much a company pays in taxes. If the government raises taxes on the oil company, the increase will naturally fall on the consumers. This is not hard to understand. The government will not be taking profits away from the oil companies, they will be taking money out of our pockets. Oil prices will rise to offset the increase in taxes. Is this how the Democrats plan to help us?

Here is what House Minority Leader John Boehner had to say about this bill:

“Unfortunately, the Democrats’ ‘no energy’ bill will only make matters worse by raising taxes and setting the table for even higher prices at the pump.”

That is exactly correct. This is nothing more than a publicity stunt by house Democrats. They know that the outcome of this bill would be higher prices at the pump, they also know that President Bush will veto this bill if it ever makes it to his desk. Democrats are just trying to win the approval of the American people by posing as if they are going after “BIG OIL” all the while knowing President Bush is going to veto it. They will then use the veto as a political tool and issue to use against the president. By vetoing this legislation even higher gas prices will be avoided but Democrats will be able to successfully paint George W Bush as being in bed with the oil companies.

It’s actually a very good strategy on the Democrat’s part, as most of the American people just don’t understand how business works evidently. They can’t lose under this scenario, the only ones that can lose are us.

The government makes more on a gallon of gas with taxes than the oil companies make. If anything, the Democrats in the house should look at investigating the windfall profits the government is making on the price of gas. Perhaps the government should give back some of their profits instead of telling a private business how much of a profit is allowed.