Saturday, May 13, 2006

What the Country Doesn't Need: A New Oil Production Tax

This November California voters may be deciding whether or not to impose a $400 million per year "extraction tax" on oil companies. The initiative, labeled the "California Clean Air Campaign," appears to have acquired enough signatures to be placed on this fall's ballot.

Every barrel of oil produced in California or offshore would be taxed to pay for research and development of alternative fuels.

The problem, of course, is that this tax would discourage production at the very time when we need production to increase so gas prices will decrease.

The bill prohibits oil producers from passing the cost of the tax on to consumers. I'd sure like to know how that would work.

It strikes me as un-American that a large enough group of people could vote to force private companies to pay for other Americans' pet development projects, and further not allow the private companies to incorporate that tax into their cost of doing business. Why don't those who want to encourage development of alternative fuels work on paying for it themselves and see if it sells? There's this concept called capitalism...


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