Tax on "big oil" is just passing gas

The following is from the Wisconsin Club for Growth Wednesday newsletter. I thought it a timely reminder of the stakes regarding the proposed tax on "big oil", a tax even Democrats now concede will be passed along to the consumer.

Passing Gas

For the second straight budget, Governor Jim Doyle included a 2.5% tax on oil companies which he claims won't be passed on to drivers at the pump. But studies have shown that one way or another, the increased cost to oil companies will be paid by consumers.

Of course, every company passes along tax increases to consumers, making their goods more expensive. Doyle's proposal would add between five and eight cents to a gallon of gas at the same time prices are nearing $3.00 per gallon.

Representative Robin Vos, a member of the Legislative Joint Finance Committee, pointed out that if the new tax is applied on a percentage basis, the tax will increase as the price of gas goes up. The current gas tax is a flat per gallon fee. In this regard, the oil franchise fee approximates the old gas tax indexing system, where gas taxes increased automatically every year without legislative action. The legislature repealed the indexing system in 2005 after Governor Doyle repeatedly raided the transportation fund to pay for other programs, at the same time he increased debt to pay for transportation projects.

At Vos’ request the Legislative Fiscal Bureau prepared a memo detailing the cost of the new tax to consumers. At $2.50 per gallon, the gas tax is expected to increase the per gallon cost by 4.9 cents. But if gas prices reach their 2008 summer levels of $4.00 per gallon, the state will tack on 8.7 cents to every gallon of gas.

Of course, legislative liberals still claim that their budget doesn't raise taxes on people in the middle class, like those wealthy people who fill up their cars to drive their kids to school and swimming lessons.

The Assembly will have an opportunity to remove the new tax when they vote on the budget Thursday, so be sure to contact your legislators today.

Democrats Gone Wild, the Madison edition

Starting this week the Waukesha Freeman will no longer be posting my column online at GMToday.com. Some changes are being made to the website and the opinion columnists are moving behind the subscription wall. Think of it as Conley Select. Or you can still read it on the dead tree version for just 50 cents. Paper, ink, it's all so retro and fun.

I'll also be posting the column here (instead of just excerpts), but not until Thursday evenings.

This week's column tackles the state budget again as the whole process has just become so much tax-and-spend Democratic porn.
Publication:Waukesha Freeman (Conley); Date:Jun 4, 2009; Section:Opinion; Page Number:10A


Democrats gone wild

Proposed budget most radical in state history

(James Wigderson is a blogger publishing at http://wigdersonlibrarypub.blogspot.com and a Waukesha resident. His column runs Thursdays in The Freeman.)


We’re in the home stretch now on the state budget process. The Legislature’s Joint Finance Committee finished with the budget (with much of the work being done late at night and behind closed doors). Now the budget goes to the Assembly, then the Senate, then finally to the governor for his final rewrite with his veto pen.

How much of the current budget proposal is going to survive is still an open question. Democrats may have the majority in both chambers, but the proposed budget certainly qualifies as one of the most radical in state history. Different Democrats may defect on different votes as the Republicans offer amendment after amendment this week. Look for more closed-door meetings, more late-night sessions, and more dealmaking as the Democrats line up the votes to make sure the budget passes.

Some of the provisions in the current budget proposal are just shocking.

Hostility to “Big Oil” has always been standard fare for the Democrats, but even Joint Finance Committee Co-Chairman Rep. Marc Pocan admits the new tax on oil company profits with the provision that the tax not get passed on to consumers might be unconstitutional. Still, he hopes to somehow fix it, according to WisPolitics.com, in order to protect $270 million for the transportation fund.

Somebody needs to ask Pocan the obvious question: If Democrats are so concerned about the transportation fund, wouldn’t it be wiser to stop raiding it, so far $1.1 billion, to fund other items in the state budget?

Then there’s the Democrats’ continued hostility to any child receiving an education outside a Wisconsin Education Association Council-approved institution. Rep. Pedro Colon, D-Milwaukee, inserted at the last minute a requirement for any school in the choice program where over 10 percent of the students had limited English proficiency to have bilingual education.

The Democrats also cut funding for choice program students by $165 each. Brett Healy of the MacIver Institute points out choice schools receive $6,607 per pupil compared to more than $13,000 for students in Milwaukee Public Schools.

Meanwhile, as a favor for the teachers unions, Democrats are repealing the Qualified Economic Offer that helps keep public education costs in check.

Republicans can seize the education issue and make it a winner in the next election cycle. Clearly they are the party of reform, while the Democrats are the party of continuing to subsidize failure.

It’s hard to pick the most brazen grab for tax money, but surely the tax on cell phones has to be near the top of the list.

In 2003 the state imposed a tax on cell phones to upgrade the 911 system to be able to pinpoint 911 cell phone calls. When the upgrades were done, the state under Governor Doyle kept the $20 million in “leftover” money. (Nothing says “home cooking” the books like “leftovers.”)

The Democrats are not only going to keep the tax in place, they are going to raise it by 75 cents per month and impose it on every phone, including the land lines. The total tax increase on cell phone users is $100 million, but it gets worse.

The Wisconsin State Journal reports that using a tax on cell phones for something other than the 911 system may make the state ineligible for federal funds. This means local communities will have to raise taxes more to pay for the costs of supporting the 911 system.

Perhaps the most absurd provision in the state budget is the idea of creating a special driver’s license for illegal aliens. Did nobody in Madison say to themselves that if we can identify the illegal aliens to give them the special driver’s licenses, we ought to just deport them?

I once described the state budget process as a horror picture. We’re now in the genre of tax-and-spend porn, “The Democrats Gone Wild.” No wonder they’re busy making decisions late at night with the curtains drawn.

If you’re tempted to smoke a cigarette afterward, they’re raising the tax on that, too.

Governor Doyle gives me gas

Governor Doyle's tax on "big oil" profits is not likely to pass the legislature. (Will any Democrats apologize to State Representative Bill Kramer now that they are the tools of Big Oil, too?) So the usual suspects are going back to their favorite revenue source: raising taxes directly at the gas pump.

Gov. Jim Doyle said Monday he’s open to a 3-cent gasoline tax increase as an alternative to his proposed tax on oil company sales.

Doyle said he preferred his plan to pay for roads by raising taxes on oil companies by $272 million over two years and barring the firms from passing the tax on to consumers.

But some business groups have instead been pushing an increase to the state’s gas tax — currently the second highest in the nation — saying it wouldn’t face the oil tax’s potential legal challenges.

"I give them credit. They’ve really worked to come up with a proposal, and I think it’s one that’s worthy of consideration," Doyle said.

The plan by groups representing oil companies, grocers, car dealers and convenience stores would include $306 million in new money over two years for the state’s road fund through the gas tax hike and new fees.

As the Wisconsin State Journal reports, Wisconsin already has one of the highest gas taxes in the country. That high tax has allowed Governor Doyle and the legislature to raid the transportation fund for nearly $1.3 billion, far more than this new tax would raise. If the governor and the legislature could keep their hands off the transportation fund, we could actually cut the gas tax and vehicle fees, not raise them.

The new taxes and fees, according to the Wisconsin State Journal:

• Raise $170 million from the gas tax.

• Raise $61 million by increasing the fee for car titles to $78 from $53.

• Raise $15 million by putting a $50 annual surcharge on hybrid vehicles.

• Use $42 million already in an environmental cleanup fund.

Nice to see the "environmental cleanup fund" is just a slush fund along with the rest of the transportation budget.

Offshore drilling ban to die peacefully

The Associated Press is reporting the House Democrats are going to let the offshore drilling ban expire.

Democrats have decided to allow a quarter-century ban on drilling for oil off the Atlantic and Pacific coasts to expire next week, conceding defeat in a months-long battle with the White House and Republicans set off by $4 a gallon gasoline prices this summer.

House Appropriations Committee Chairman David Obey, D-Wis., told reporters Tuesday that a provision continuing the moratorium will be dropped this year from a stopgap spending bill to keep the government running after Congress recesses for the election.

Republicans have made lifting the ban a key campaign issue after gasoline prices spiked this summer and public opinion turned in favor of more drilling. President Bush lifted an executive ban on offshore drilling in July.

"If true, this capitulation by Democrats following months of Republican pressure is a big victory for Americans struggling with record gasoline prices," said House GOP leader John Boehner of Ohio.

Democrats had clung to the hope of only a partial repeal of the drilling moratorium, but the White House had promised a veto, Obey said.

Does this mean House Speaker Nancy Pelosi failed to save the planet?

Drill Here, Drill now Tuesdays

See Wake up America for more information about Drill Here, Drill Now Tuesdays

Join the Movement

DRILL HERE DRILL NOW TUESDAYS

for bloggers

My Gas Price:$3.75

American needs to drill here drill now. America is having a energy crisis and we need to do something now!

Urge Congress and pass a bill to drill in America, where

the United States has vast oil and gas resources onshore and offshore that are currently illegal to develop and therefore inaccessible.

U.S. law prohibits the development of approximately 38 billion barrels of undeveloped oil resources (19 billion barrels onshore and 18.92 billion offshore).

U.S. law prohibits the development of approximately 180 trillion cubic feet of undeveloped natural gas resources (94.5 trillion cubic feet onshore and 85.7 trillion cubic feet offshore).

Also

CONGRESS RECENTLY VOTED TO MAKE IT ILLEGAL TO DEVELOP U.S. OIL SHALE RESOURCES

With oil prices at an all-time high, Americans are facing escalating gas, diesel, and aircraft fuel increases. Oil prices are projected to increase further.

Congress, however, has made it illegal to develop vast domestic oil resources in large parts of the United States.

The most startling Congressional prohibition on domestic oil production concerns the recently enacted ban on the development of oil shale resources in parts of Colorado, Utah, and Wyoming in the Green River Formation. According to a Rand Study estimate, this reserve contains over one trillion barrels of oil, with 800 billion barrels fully recoverable, or three times the current oil reserves as Saudi Arabia:

http://www.americansolutions.com/General/?Page=1c1a10c1-15fd-4ad8-a426-b9a87f635903

http://www.americansolutions.com/General/?Page=d4b72449-7edb-493d-88ff-76bfe669e0f2

Drill here drill now Tuesdays

I keep forgetting to do this, but Jessi at Wake Up America has started something a regular feature and has asked other bloggers to join in.

DRILL HERE DRILL NOW TUESDAYS
Join the Movement

My Gas Price: $3.85

American needs to drill here drill now. America is having a energy crisis and we need to do something now!

Urge Congress and pass a bill to drill in America, where

the United States has vast oil and gas resources onshore and offshore that are currently illegal to develop and therefore inaccessible.

U.S. law prohibits the development of approximately 38 billion barrels of undeveloped oil resources (19 billion barrels onshore and 18.92 billion offshore).

U.S. law prohibits the development of approximately 180 trillion cubic feet of undeveloped natural gas resources (94.5 trillion cubic feet onshore and 85.7 trillion cubic feet offshore).

Also

CONGRESS RECENTLY VOTED TO MAKE IT ILLEGAL TO DEVELOP U.S. OIL SHALE RESOURCES

With oil prices at an all-time high, Americans are facing escalating gas, diesel, and aircraft fuel increases. Oil prices are projected to increase further.

Congress, however, has made it illegal to develop vast domestic oil resources in large parts of the United States.

The most startling Congressional prohibition on domestic oil production concerns the recently enacted ban on the development of oil shale resources in parts of Colorado, Utah, and Wyoming in the Green River Formation. According to a Rand Study estimate, this reserve contains over one trillion barrels of oil, with 800 billion barrels fully recoverable, or three times the current oil reserves as Saudi Arabia.

Best of the Wisconsin Blogs

No, not me. Well, it should be me every week, but Patrick at Badger Blogger got tagged with it this week (he awaits significant financial reward for the honor).

Heating woes
Hang onto your pocketbooks again; along with all of the new taxes, some disguised as fees, Wisconsinites can also count on an average of $200 more in home heating costs this winter. If you use natural gas to heat your homes, expect a 21% spike, and if you use oil, look for about a 26% spike. And if you live in a rural area and use propane to heat your home, look for a 13% spike, to an average of nearly $2,000 this winter.

Now, aren't you glad that the Democrats are preventing us from gaining access to our own natural resources? What's a couple hundred bucks to a Wisconsin family, when it means that a caribou doesn't have to duck under a pipeline or some damn fool thing like that?

Patrick Dorwin
Badger Blogger
badgerblogger.com

Excuse me, just a little bit of gas

Jessi Olson, an enthusiastic new blogger that I met the other day, has a new project, Drill Here Drill Now Tuesdays. I'll be playing along, too, along with some other bloggers.

Help spread the word, and also support the Wisconsin Institute for Leadership's call for the repeal of Wisconsin's Minimum Markup law. State Representatives Leah Vukmir and Bill Kramer have called upon the governor to hold a special session of the legislature. Call Governor Doyle at 608-266-1212 to tell him you want the minimum markup law repealed, a position he has taken in the past. (Why the governor wouldn't take this opportunity to embarrass Speaker Huebsch is beyond my understanding.)

Finally, did your congressman receive a "Friend of Foreign Oil" t-shirt from Americans for Prosperity? Check out their website to see if your congressman is a friend of OPEC, or a friend of the American motorist.

There are things we can do today to make our energy future more affordable for Wisconsin families while reducing our dependence on foreign oil. Why not start now?

Doesn't he do radio?

Update! I was right. He does do radio. (see comments)

WIL takes on the minimum mark-up law

The Wisconsin Institute for Leadership issued the following press release today:

Wisconsin Lawmakers Could Move to Lower Gas Prices by Next Week
Wisconsin Institute for Leadership Urges Doyle to Call Special Session to Repeal Minimum Mark Up Law
[Madison, Wisc.] Gasoline prices in Wisconsin could be dramatically reduced if the state's arcane Minimum Mark Up Law was repealed. The Wisconsin Institute for Leadership (WIL) is urging Governor Doyle to call a Special Session of the state legislature next week to reduce gas prices here.

"This is a dumb law that hurts families in Wisconsin," said WIL Executive Director Brian Fraley. "With gas at more than four bucks a gallon, now more than ever, our elected officials should move to repeal this law or explain why they support this constraint on the free market."

Under Wisconsin's Minimum Mark Up Law, which has been in place since the 1930s, fuel wholesalers are required by the state to mark up their prices by at least 3 percent and retailers are required by the state to raise prices by at least another 6 percent. This adds a whopping 36 cents a gallon to the cost of $4.00 a gallon gasoline.

"If the Governor were to bring this issue to the forefront now, I'm confident this ridiculous law would be wiped off the books forever," said Fraley. "With families and businesses feeling tremendous pain at the pump, now is the time to repeal the minimum mark up law."

The Institute is encouraging Wisconsin residents to call Governor Doyle to encourage him to announce a Special Legislative Session to rescind the Minimum Mark Up law. His office number is 608-266-1212.

The Wisconsin Institute for Leadership is a state-focused independent advocacy organization that works to educate and mobilize Wisconsin residents on policies that expand individual liberties, encourage free markets, promote high quality education and demand accountability from public officials.

Working to preserve and improve the quality of life for all Wisconsin residents, WIL encourages ethical governing which promotes private sector solutions to the economic and social challenges facing the state during the 21st Century.

Visit WIL's website: http://www.wilead.org/ and participate in the free grassroots WIL Forum at http://wilead.ning.com/.

In 2007 a federal magistrate ruled that the Minimum Mark Up Law violated the commerce clause of the U.S. Constitution because compliance with the law was not actively monitored. Yet the law continues to be in place and in force in Wisconsin.

Unhappy with any idea that might actually benefit Wisconsin families, the very left-wing One Wisconsin Now (with their wonderfully fascist-sounding name) posted an attack on their blog accusing them of being corporate shills:

Despite the division in the conservative ranks about the law, the group has picked a side. Why? Well, consider this: The chair of Fraley’s three-person board is John Behling. Behling served as a long-time lobbyist for Capitol Consultants. Two of Capitol Consultants clients are Wal-Mart and Mc Lane Foods, both of which registered in favor of a bill this session (AB 820) calling for an end to the minimum markup law. So surprise, surprise, Fraley and his new group are making this case.

So one board member has a connection to an issue and it excuses OWN from coming up with any substantive arguments against the repeal of the minimum markup law. Instead of mudslinging, perhaps One Wisconsin Now could focus their energies on ending unconstitutional and archaic laws against competition and free enterprise.

Unless, of course, they like high gasoline prices.

Mark it down

Over at FoxPolitics.net, I wrote about the absurdity of the Democrats wanting to punish "Big Oil" for big profits when they refuse to do anything to repeal the law that mandates profits, the minimum markup law.

Is Wisconsin ready for a serious energy discussion?

Brian Fraley at the Wisconsin Institute for Leadership thinks so.

I believe that with a little effort, we can reach a critical mass on a whole host of energy-related issues. Minimum Mark Up repeal, the streamlining of boutique fuel requirements, a new push for domestic production...

Meanwhile, Charlie Sykes has this update on Congressman Steve Kagen's (D-Green Bay) flip-flop on drilling domestically.

And of course you can still sign an online petition to support domestic drilling for oil.

If you haven't yet, you want to meet Phil

From Fight Back Wisconsin:

Phil Williamson is trying to show members of Congress that the voices of the people still matter, and Americans for Prosperity wants to help. Williamson has been circulating petitions in and around his native town of Waterford to try and get the attention of Congress when it comes to gas prices. In the petition, Williamson informs elected officials in Washington that we (the people of Wisconsin) are at our "wits end" with high oil and gas prices. The petition further calls for action from our Representatives in the form of exploration and drilling for oil in the United States, in addition to the building of new oil refineries.

This coming weekend as you're grilling out, pass the petition around to a few friends and family and ask them to sign. Take the couple of seconds to sign the online petition. Because, as Phil says, "If you don't sign up, please don't complain to me about how high gas prices are."

(Ht: Real Debate)

Cars don't run on snake oil

The latest Wisconsin Club for Growth newsletter (hot off the presses!) has an interesting commentary about the price of gasoline:

Enter Senator Barack Obama: the silky smooth, new kind of political leader offering hope as an antidote to the country's despair. Hope, and a plan to tax the so called "windfall profits" of oil companies.

"I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," the Illinois Senator said.

So while ordinary Americans suffer at the gas pump, Obama's plan is to put more money in the federal treasury and dole it out through unspecified new social programs. Obama and his colleagues, who failed to pass the measure in the U.S. Senate last week, are hoping that voters will give them credit for trying to poke oil companies in the eye with a sharp stick, inflicting pain on Big Oil as the masses suffer through the crisis. The problem for Obama and other Senators is that most voters are inconveniently pretty savvy about how the oil market really works. They also understand that the cost of growing government through any tax will far exceed the value promised from the so called relief.

In Wisconsin, Governor Jim Doyle and the Senate Democrats proposed a similar scheme to tax the profits of oil companies and use the money to pay for transportation projects. While most people had no problem sticking it to Big Oil, they had no faith whatsoever that Big Oil wouldn't stick it right back to them at a cost of 7 cents per gallon. And cutting into the oil companies' profits in Wisconsin would likely result in lowering our supply and driving prices up more as a result.

As Washington's snake oil salesmen are continuing a decades old energy policy of finger pointing and pontificating, it might seem as though the state's snake oil sales force are powerless to offer relief. But are they?

True, Governor Doyle and the legislature can't authorize domestic exploration of oil, which would increase supply and reduce our reliance on foreign oil. But what they can do will have a more immediate impact. The legislature and the Governor can remove the ridiculous, antiquated 9.18% minimum mark up on gasoline in Wisconsin. At four dollars a gallon, the markup increases the price at the pump by almost .40 cents a gallon. A reduction of that magnitude would bring some relief to the state as area residents, businesses and farmers face the devastating economic impact of flooding, tornadoes and other storm damage.

Someone should tell the governor the minimum markup law also adds to the price of golf balls. I bet the law would be repealed tomorrow.

The Ryan Express?

Congressman Paul Ryan is a good looking guy. Or so I am told, as I really hadn't noticed. He's smart, energetic, and moving up. He has big ideas. He could be the Republican nominee for Vice President. If not this election, four years from now.

Congressman Ryan also just proposed a comprehensive plan, The Roadmap for America's Future, that may end up being his party's agenda in the coming years. Or it may be the roadblock to Paul Ryan's future.

The room at Janesville City Hall was packed. Aides scrambled to bring in more chairs. Ryan stood in the center with the screen behind him. He could have been a vice president of finance of a local corporation explaining the profit and loss sheet with his Powerpoint presentation and his laser pointer.

Ryan admitted his plan is not something we can expect to happen right away. After all, he told the packed house, "Here’s the problem with Congress. We’re told, ‘Don’t try something that’s risky; there’s an election next year.’" Of course, Ryan adds, there’s always an election next year. He gets applause for the line, but the questions about the plan are skeptical.

I think the reception was generally positive, even from the members of the audience who were not members of Americans for Prosperity. But the audience wasn't exactly ready to march out onto the battlefield with a cry of "For St Paul and Entitlement Reform!"

The alternative, Ryan warned, is to watch government spending consume more and more of our gross domestic product, crushing the standard of living and reducing America’s competitiveness in the world.

It’s a bold plan, all the more daring when you consider that the most applause Congressman Ryan received all evening was when he switched topics to oil production. There were very few in the room who objected when Ryan suggested drilling for more oil in Alaska, in the Rocky Mountains and off the coast of Florida. When he said, "Build more oil refineries" you would have thought he was telling Janesville he was secretly Oprah and giving them all a free car.

But Ryan warned the audience that while most of them were supportive of more domestic oil production, "You should see all the letters I get against it."

At that moment I flashed back to the end of "Von Ryan’s Express." Sinatra is laying dead on the tracks, riddled with holes by the Germans as the soldiers who reluctantly followed him escape to freedom.

Congressman Ryan’s future is often talked about in terms of a possible Senate candidate or even vice president. We’ll see if he can avoid the tragic movie ending while leading us to entitlement reform.

On the other hand, how often can I work a Frank Sinatra reference into a column for the Waukesha Freeman?

For proof that I was there, Tee Bee at the Badger Blog Alliance caught a picture of my good side. Can you see the halo?

Peeking at oil

Jim Manzi at National Review Online's The Corner takes a look at all the talk of "peak oil" and brings it into perspective.

Roughly speaking, forecasts indicate that we are 20 – 30 years from peak oil today, just as forecasts generally indicated that we were 20 – 30 years from peak oil throughout the 1970s and 80s.

Unsurprisingly, the DOE has taken a serious look at this question. Their best guess (and they are rigorous enough to put a range of many decades on this) is that peak production will be reached sometime in the middle of this century. The International Energy Agency projects that production will continue to increase at least through 2030. So does OPEC.

Dinauer continues:

"Oh, and since oil now costs over $120 a barrel, does that mean oil has peaked, Jim?"

On an inflation-adjusted basis, this is almost exactly what oil cost in 1980. Does that mean oil production peaked in 1980?

I’ll also note that while the world spent about 6 percent of its total economic output on oil in 1980, this is down to about 3.5 percent today. Maybe this is why I see no observable signs of the collapse of modern civilization resulting from the current run-up in oil prices.

Cup of Jo

While Jo Egelhoff is off campaigning for the state assembly, Fred Dooley, Lance Burri and I are pinch-hitting. It's the least we can do. Really, the absolute least. Fred Dooley has his first installment today, "Big Coffee".

Well, there is one thing you can say about oil, lots of people have made lots of money from it. Those guys working the platforms drilling for and pumping the crude, the people transporting that oil all over the world, the refiners, distributors, marketers and retailers. Lots of money and lots of profits to be had for something that at an all time high is costing us around $3.69 a gallon.

$3.69 a gallon… Rank amateurs.

I like to play a game on my blog called Guess the Number. I throw up a raw number and invite my readers to guess what that number represents. Let me throw a number to you, $17.60.

I won’t keep you in suspense, Starbucks charges about $1.65 for a 12-ounce cup of coffee, that is $17.60 a gallon. And that’s for the plain old drip coffee not any half-caf-non-frappa-ccino whatever.

The reader comments already have a reference to the "Big Oil" conspiracy. Oliver Stone on international trade.

Speaking of John Kerry

Pulled this right off the senator's website:

01/08/08
KERRY CALLS FOR FEDERAL INVESTIGATION OF GAS PRICE GOUGING

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01/04/08
Kerry announces $1 million federal grant for restoration of Plymouth's wetlands

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01/02/08
Kerry Opposes Bush Administration Chukchi Sea Oil and Gas Lease Sale

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I think that the press release of 1/2/08 (and others like it) might have something to do with the high prices he's complaining about on 1/8/08.