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Congress' Next Bad Idea Would Destroy the Shale Boom

Last week, six Members of Congress, led by Rep. Dennis Kucinich (D-Ohio), introduced the "Gas Price Spike Act."

With concerns over the likelihood of higher gas prices this summer, the bill and its sponsors propose the creation of a "Reasonable Profits Board" that would control the profits of oil and gas companies.

Under the bill, this board – made up of unelected bureaucrats – could apply a "windfall profit tax" on the sale of oil and gas at rates of 50% to 100%. These taxes would take aim at corporate profits that the board feels are "unreasonable" or "unfair."

Congress would then appropriate the money raised to subsidize electric vehicles and mass transit.

Now you may want to take a second and breathe, because this is no satire.

Oh, and the proposed bill offers no specific guidance on how the board would determine what represents a "reasonable profit." How do we even begin to define this term? Are some profits more unreasonable than others? And who decides what is "reasonable?"

Apple Inc. (Nasdaq: AAPL) last week shattered earnings expectations. The electronics company has a profit margin north of 20%; meanwhile, the oil and gas industry has a sector-wide margin a little less than 10%.

And though the price of oil and gas will rise in the future – and despite the name of the bill – a reasonable profits board would do nothing to improve consumers' plights at the pump.

In fact, it would only make things worse for people like you and me.

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Congress’ Next Bad Idea Would Destroy the Shale Boom
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  1. Albert DerTatevasian | January 30, 2012

    I am proud to have such a wonderful firm such as yours to give me information at my place.
    I once was a newspaper delivery for, the PITTSBURGH PRESS in Swissvale, Pa . in 1940,1941.
    I read the paper after delivering my route. I lived with my mother and father Siranoush,and
    Tatevos. They were of Armenian Heritage. Dad Tatevos from Russian Armenia and Mother from
    Asia Minor, now called Turkey. After 1915 Armenians who immingrated to USA who lived in Turkey referred it as Asia Minor Why?? Ask Google.

    Albert , the good shepherd, the Church/people mentor id Jesus .

  2. Greg Czora | January 30, 2012

    For anyone who has read the novel "Atlas Shrugged" by Ayn Rand, the idea that a government official would attempt something like this is no surprise at all. In fact, it is precisely what one would expect given the size and viewpoint of today's government officials.

    The novel was published about 1957 and accurately predicts current events. In the story business people in a sinking economy start a successful recovery in Colorado mining oil shale. And thanks to a government very much like the one we have now, they recovery is squashed out of business by very similar legislation. How is that possible?

    Rand was able so accurately predict what will happen because she understood the fundamentals of what is required for a free society and free economy to function — unlike most people alive today.

    If you are tired of being confused about why our country is slipping down the slippery slope to a 3rd world economy, read this novel and you won't be confused any more.

    Now there are a lot of people who will say the comparison is just a fluke, but there are always people who say things like that. Read the book, use your own judgement, and decide for yourself. If you don't, you soon may no longer have that choice…

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