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| President Obama tours Solyndra Inc. in Fremont, Calif., Wednesday, May 26, 2010. Solyndra is a solar panel manufacturing facility. (AP Photo/Paul Chinn, pool) |
(Washington Examiner) Any Economics 101 textbook will tell you that if you want less of something, you tax it; if you want more, you subsidize it. Apparently, President Obama believes the laws of economics do not apply to him. On Thursday, in response to rising gas prices at the pump, he proposed raising taxes on oil production.
"With high oil prices around the world, they've got more than enough incentive to produce even more oil," Obama said. How does he know this? He doesn't say. But he did claim that oil companies "pay a lower tax rate than most other companies." This is actually not true. The big oil companies targeted by Obama's tax hike have an average effective tax rate of about 33 percent, higher than almost any other industry in the country.
That tax rate does not include the almost $100 million a day that those firms pay the federal government in rents and royalties for the honor of producing energy from federal lands -- which is at a historic low, by the way. Obama may claim that "we're producing more oil right now than we have in eight years," but that increase is all happening on private lands. Oil production on federal lands -- the only ones Obama controls -- is down 12 percent from 2003, according to the U.S. Energy Information Administration.
And what does Obama want to do with all the tax hikes he wants to take from oil companies? Does he want to rebate the money to consumers at the pump? Of course not. That would only encourage more oil consumption. Obama wants to do the exact opposite. Instead of giving his higher oil tax revenue to consumers, Obama wants to waste it on more Solyndras.
"Instead of taxpayer giveaways to an industry that's never been more profitable, we should be using that money to double down on investments in clean energy technologies that have never been more promising," Obama said. Note that after more than 30 years of federal subsidies, less than two percent of all U.S. energy production comes from wind and solar.
"America is going to pursue an all-of-the-above energy strategy," Obama said Thursday. But earlier in the week, his Environmental Protection Agency issued new regulations effectively banning the construction of any new coal power plants. According to the Energy Information Administration, coal accounts for 20 percent of all domestic energy use. Without new coal power plants, Obama's coal ban will drive up energy costs for everyone, across all economic sectors.
"The government's view of the economy can be summed up in a few short phrases," President Reagan liked to joke. "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Obama's energy policy is a bit different: If it increases oil production, tax it. If it lowers energy prices, ban it. And if it wastes taxpayer money, double down on it.
