The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Presidential Candiates Want Us To Pay $5.00 Per Gallon

Posted by iusbvision on April 15, 2008

For the first time in my lifetime, I have actually heard a political campaign ad for a Presidential primary on the local stations. Since this opportunity comes along once in a blue moon, I have been paying close attention to these ads.

The ad that has captured my attention most has been from Barak Obama. In one ad, Barak Obama proclaims that Exxon Mobile made over 40 billion dollars in profit last year while we are paying over three dollars a gallon at the pump.    

It is no great secret that Exxon Mobile made around 40 billion dollars in profit last year. While those are larger numbers than any of us will ever see, it is Obama’s plan to fix the situation that caught my attention. He states that it is his intention to create a Windfall Profits penalty for the oil companies. He is not the only one, Hillary Clinton and has made similar statements on the campaign trail.

Senator Clinton said “I want to take those [Exxon Mobile’s] profits and I want to put them into a strategic energy fund”. Here are two examples of political candidates punishing business for being successful.

Like everyone else, I too am not a fan of paying $60.00 to fill my tank up, but taxing the oil companies is not the answer. Before anyone gets on the bandwagon to punish Exxon Mobile, remember that Exxon Mobile employs over 80,000 workers. When businesses have profits, they expand which creates more jobs. When their profits dry up, the downsize. A vote for Obama or Clinton is a vote to take away American jobs.

There is also something to be said about punishing success. Follow this logic: Our economy runs on the strength of the American business community. Americans have money to spend on products when they have jobs. Americans have jobs when businesses can afford to hire them. When Americans get hired they then have money to buy goods and services, creating more work for the workers, and the great circle of wealth is complete.

Did anyone see the government mentioned in that scenario? No, because the government only gets in the way. If the Windfall Profits penalty gets passed, as Senators Clinton and Obama are clamoring for, it will hurt businesses.

Now, look at the same situation with government interference. First, government taxes the businesses, which creates less money for the business to invest. This means there is less money to hire new employees and may even require downsizing in order keep the bottom line in good shape. No successful business will sacrifice profits, unless it wants to go bankrupt. Now there are less jobs available, which means there are less people able to buy goods, which again makes less money for the business and the circle continues.

Of course, there is another solution for Exxon, they can always absorb the Windfall Profit penalty and pass it directly onto the customer. Under no circumstances do business pay taxes. They never have and they never will. Taxes always get passed onto the consumer. Businesses do not pay taxes, consumers do. Obama’s and Hillary’s plans to tax the oil companies is really a plan to give us another tax.

Thanks a lot.

Jarrod Brigham

 

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