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Obama and Boehner Propose Raising Gas Prices

by Keith Koffler on April 26, 2011, 8:08 pm

President Obama and House Speaker John Boehner joined hands and jumped off an economic cliff, proposing together a way to INCREASE gasoline taxes as you prepare for $5 gasoline at the pump.

It’s good to know these two are on top of the situation. Perhaps its’ not terribly surprising in the president’s case since he proposed to lower the deficit by spending $1 trillion on a new health care benefit. Same logic.

How do they propose to do this? Raising taxes on oil companies by eliminating tax subsidies. Obama wants to “reinvest” the money in alternative energy. This may or may not be a good long term solution. But in the short term, what will the oil companies – what does any company – do when its taxes go up? PASS THE COSTS ALONG THE THE CONSUMER.

That is, higher gas prices.

But who cares? Boehner and Obama were on a roll. What better way for the country’s two highest ranking politicians to play to the crowd than by promising to disembowel the evil oil companies.

Boehner opened the door by launching the attack.

Asked by ABC’s Jonathan Karl, who noticed Boehner’s fangs were bared, if it was time to take away the subsidies, Boehner said, “Kill, kill, kill.”

It’s certainly something we should be looking at . . . We’re in a time when the federal government’s short on revenues. They ought to be paying their fair share.

Get rid of the depletion allowances. Kill. Kill.

Everybody wants to go after the oil companies and, frankly, they’ve got some part of this to blame . . .  I dont think the big oil companies need to have the depletion allowances.

This got Obama salivating, calling for Oil Baron blood. “Good Boehner. Nice puppy. Kill. Kill.”

He fired off a letter to Congress.

I am writing to urge you to take immediate action to eliminate unwarranted tax breaks for the oil and gas industry, adn to use those dollars to invest in clean energy to reduct our dependence on oil . . . I was heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies for the oil and gas industry.

I’ve never forgotten the time when at a restaurant where I worked as a waiter and bartender for several years in Washington DC, the city raised “sin taxes” on alcohol. The owner marched angrily downstairs to computers, a list of the new taxes in his hand, and added them, penny for penny, to the price of every drink in the place.

Today, White House Press Secretary Jay Carney was asked – by me – why the oil companies won’t act like any small or large business and pass the taxes on to consumers. Here’s the exchange.

WHITE HOUSE DOSSIER: But you don’t know that they won’t pass it on, do you?  Is there any study you’ve done? Have you spoken with the oil companies?

MR. CARNEY:  I think I’ve addressed this.  I’ve addressed this.  What I’ve said is on balance, knowing what we know and looking — and analyzing what we know, that this is overwhelmingly the right thing to do.

WHD: Even though prices may go up in the short term,

MR. CARNEY:  I’ve just addressed it.  Based on what we know –

WHD: They’re passing the higher price of oil onto consumers now.  Why wouldn’t they pass a higher tax burden onto consumers?

MR. CARNEY:  Well, based on what we know — you have companies making billions of dollars in profit, $100 million a day in profit — that’s great, okay?  That’s good.  That’s fine.  We should not be taxed.  We — the American taxpayers should not be subsidizing that profit, okay?  I mean, that’s just in and of itself, we believe, the right policy.

No answer. Because Jay’s a smart guy and a former reporter, and he knows that sticking it to consumers is exactly what they’d do. His point is that “on balance,” eliminating subsidies the right thing to do. But the bad part balancing the potential long term good is that gasoline prices would go up tomorrow.

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{ 24 comments }

LC southern April 26, 2011 at 8:19 pm

Boehner opened the door and Obama charged through it. Leaving American’s trampled with taxes in their wake…

Keith Koffler April 26, 2011 at 10:33 pm

We’ll see a lot of this from Boehner.

srdem65 April 26, 2011 at 8:57 pm

They are losing their minds in DC. Raise the taxes, cut the subsidies, eliminate the taxable deductions and all will be well only in the minds of the deluded. The only answer is to cut our spending, now.

Keith Koffler April 26, 2011 at 10:33 pm

Right – it’s a tax increase just as the economy is trying to come back.

Star April 27, 2011 at 11:22 am

Is it? Trying?

Susan April 26, 2011 at 10:25 pm

Great questions and follow-ups Keith. Now that is how a real reporter works! When he says: What I’ve said is on balance, knowing what we know and looking — and analyzing what we know, that this is overwhelmingly the right thing to do.
In other words…We know it is overwhelmingly the right thing to do, and we don’t have to tell you how we know because we’ve already analyzed what we know.
Heh?

Congress made a big mistake putting Boehner and his cronies back in leadership after the 2010 historic elections. Mr. Boehner is an establishment Republican. He has been a representative since 1990….that is 21 years in Washington DC. They are all so wrapped up in the “gotcha” politics they’ve played for so long. Mr. Boehner says he doesn’t want to get caught in a trap and look like he’s supporting big oil, so he throws the taxpayer under the bus. Hello Mr. Boehner, the Democrats are going to blame you no matter what you do, and you will never be popular with the MSM. Accept that as fact and stand up and defend this country with courage you wimp.

Keith Koffler April 26, 2011 at 10:34 pm

Thanks Susan! I try not to let him get away with stuff, and he knows it.

It is deeply ironic that it is Boehner who is leading the Republicans. The conservatives need to watch him like a hawk.

Nukohed April 26, 2011 at 11:32 pm

Boehner’s only way out of this is to offer (to the oil companies) a tax break if you keep oil prices low. Never give the whitehouse any wiggle room.

Keith Koffler April 26, 2011 at 11:53 pm

A tax break would indeed lower prices. There’s a big old fuel tax they can cut.

Nukohed April 27, 2011 at 12:51 am

IF

If taxes were 10% across the board

If welfare had only 2 years left

If the federal gas tax were 0

If oil leases were unrestrickted by thr EPA

If we werent tied in to any war

If the Fed had more tax income than ever

If the I had my way…my vision of hope and change …I would have a job and change…we would wouldnt be having this conversation.

Old Timer April 26, 2011 at 11:58 pm

Has anyone considered that we are part of the oil companies. If we have 401Ks, a pension investment, a mutual fund or an direct owner of the stock…all owners of oil companies’ stocks. Our assets go down if the oil companies are penalized.

Oil companies are composed of the owners, the managers, the workers, the vendors and the customers.

Don’t we want strong oil companies in order for them to compete with the giants owned by the countries such as the Russia?

Reid Porter, API April 27, 2011 at 11:09 am

Old Timer, you make a number of good points here and might find the study released this week by Robert Shapiro of SONECOM of interest: “Oil and natural gas companies provide strong support for public pension funds,” http://www.api.org/statistics/upload/Pension_Funds_Interim_Report_04_20_11.pdf

Their previous study also looked at “The Distribution of Ownership of
U.S. Oil and Natural Gas Companies,” http://www.api.org/statistics/earnings/upload/Shapiro_Pham_Study_final_9_17_07.pdf

Both of these studies were commissioned by the American Petroleum Institute and you can find more information on http://www.energytomorrow.org

Rowwdy May 30, 2011 at 10:09 pm

So you have investments in OPEC who has been manipulating and raping Americans for decades? Sorry dude, I have no sympathy for you.

jeff April 27, 2011 at 12:26 am

Jay Carney is a spineless,little tool that will move on to greener pastures in around ,I dont know ..whats the average,8-9 months. His attitude over the Easter issue was atrocious for someone representing the office.But of course,then you look at the office.

William April 27, 2011 at 7:06 am

We — the American taxpayers should not be subsidizing that profit, okay?

Since I have oil company stocks in my retirement portfolio and pay taxes he’s telling me that I shouldn’t subsidize myself.

Star April 27, 2011 at 11:24 am

Bulletin from the Flyovers–even my Got Rocks sister in her Infiniti has noticed gas prices are high. When it hits the Linda threshold–something must be done!

MT for re-redistribution April 27, 2011 at 1:07 pm

These jokers would give a kidney to come up with a new shell game to get more tax money. All the old ones are no fun any more, thanks to too many people with better than 3rd grade educations. No more subsidies, let the oil companies stick it to the people, more money for socialist programs.

I agree that there should not be subsidies for the oil companies. But the reduced budget hit should resolve into lower tax burden because we are going to pay more for gas. Bottom line here is we all just got hit with a tax hike to pay for more inefficient government programs.

Stefan April 27, 2011 at 10:24 pm

It might help if General Electric paid their “fair share” of taxes on their 2010 profits. They paid nothing. And Immelt is head of some group of Obama’s advisors.

Coincidence, I think not.

Also – GE OWNS PayPal Extras Mastercard. Yep – that’s what the GE on GE Money Bank on your PayPal statement stands for.

And their accountants claim the LOST money in 2010.

Didn’t Ken Lay & Dennis Kosloski get in trouble with funny accounting practices?

Aren’t these the questions reporters would be asking – if we had a truly independent media instead of a White House cheerleading squad?

Jeff April 28, 2011 at 4:02 pm

Are all the advertisers on this site “sticking it to consumers” as well ?

I have to assume that you consider anyone who you pay for services or products as someone who is sticking it to you I guess …

Enough with the demoagogic populist phrases …

rahul May 3, 2011 at 7:27 am

this is riduclous that the gas prices are raising obama is being greedy how the fuck country will survive if the gases prices go up

Aaron May 5, 2011 at 1:27 pm

This article is a load of crap. Oil companies cannot “pass taxes on to the consumer,” in fact that is a complete myth. What taxes a corporation pays is based on their income, so the idea that taxes get passed on to consumers is ridiculous. If corporations charge their consumers more, they will pay more taxes. You can’t “pass a tax along.” Also, as far as gasoline prices go, they are based on the price of a barrel of oil, so gas companies basically cannot raise their prices simply because of taxes. That would kill them with the competition. A joint economic committee even came to this conclusion under the Bush administration (http://www.seia.org/galleries/default-file/JEC_Analysis_Tax_Provision_199.pdf). That pretty much nullifies this author’s arguments.

Rowwdy May 30, 2011 at 10:20 pm

Were you around in 1974 when a gas crisis hit the common folks? Revisit it. It happened just like the article is stating. There was almost a revolution over the mess.

Reverend Juan May 11, 2011 at 1:29 am

But be sure to fund NPR, which, btw has hired a lobbyist.

J. Gist May 30, 2011 at 6:01 pm

BS…only way we should do this, is if we do it across the board…for farmers and every other blood sucking enterprise living off the sweat of others…DO IT, BUT DO IT FOR ALL. EFF the union, teachers, public workers, car companies, etc…then vow and put in a law that no more BAILOUTS EVER!