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Two More Gas Tax Opinions

Posted: January 28, 2015 by ShortTimer in Energy, Tax, taxes, Tyranny

The first via The Federalist:

You can understand it only if you understand that in some minds there is a constant imperative for the expansion of government. The only question they ask is whether they can get away with it. When gas prices are low, they think they can, so that is what they advocate.

That summarizes the whole argument for.

The second is Charles Krauthammer’s opinion piece advocating a gas tax, titled “Raise the Gas Tax.  A Lot.

For 32 years I’ve been advocating a major tax on petroleum. I’ve got as much chance this time around as did Don Quixote with windmills. But I shall tilt my lance once more.

The only time you can even think of proposing a gas tax increase is when oil prices are at rock bottom.

32 years of advocating for a tax that no driver wants.  He’s got a much better chance that Don Quixote, because things like the gas tax end up with “bipartisan support” of big government activists on both the left and the right.

The hike should not be 10 cents but $1. And the proceeds should not be spent by, or even entrusted to, the government. They should be immediately and entirely returned to the consumer by means of a cut in the Social Security tax.

And that’s where Krauthammer’s entire idea fails.  “We’ll raise one tax so we can drop another” will never, ever, ever happen.  The first tax will be raised, the second will never go away.

The rest of his math is based on “savings” to an “average driver” that probably makes sense to someone from the east coast or DC who only has to drive a few minutes to work if at all (in Krauthammer’s particular case, I’m pretty sure he doesn’t drive anymore at all).  It’s a massive burden on people who live in geographically larger states.

It’s win-win. Employment taxes are a drag on job creation. Reducing them not only promotes growth but advances fairness, FICA being a regressive tax that hits the middle and working classes far more than the rich.

So “fairness” is to tax the provinces while the capital feasts?  Also, when has the tax system ever been about “fairness”?  If that were the case, we should get rid of all “sin” excise taxes right now, because those are made to modify behavior based on government using force to manipulate the economy.

A $1 gas tax increase would constrain oil consumption in two ways. In the short run, by curbing driving. In the long run, by altering car-buying habits. A return to gas-guzzling land yachts occurs every time gasoline prices plunge. A high gas tax encourages demand for more fuel-efficient vehicles. Constrained U.S. consumption — combined with already huge increases in U.S. production — would continue to apply enormous downward pressure on oil prices.

A tax is the best way to improve fuel efficiency. Today we do it through rigid regulations, the so-called CAFE standards imposed on carmakers. They are forced to manufacture acres of unsellable cars in order to meet an arbitrary, bureaucratic “fleet” gas-consumption average.

This is nuts. If you simply set a higher price point for gasoline, buyers will do the sorting on their own, choosing fuel efficiency just as they do when the world price is high. The beauty of the tax — as a substitute for a high world price — is that the incentive for fuel efficiency remains…

His FICA argument is nonsense because no tax cut will be passed.

His “altering car-buying habits” argument only works if you accept the basic premise – that people need to be forced to not buy “gas-guzzling land yachts”.

Also, there’s already a tax on buying anything that doesn’t meet an arbitrary, bureaucratic “gas guzzler” gas consumption decision:

Not that welfare recipients would be buying a Shelby.

Krauthammer’s argument is that we need to raise taxes to punish the consumer even more for personal decisions that Krauthammer’s decided are bad decisions.  Yay big government.

And finally, lower consumption reduces pollution and greenhouse gases. The reduction of traditional pollutants, though relatively minor, is an undeniable gain. And even for global warming skeptics, there’s no reason not to welcome a benign measure that induces prudential reductions in CO2 emissions.

Except it’s not a benign measure.  The power to tax is the power to destroy.  This is a tool to force people into what DC wants you to drive, not what you want to drive.  Their reasons hinge on the idea that you need to be coerced into their worldview.

If given the choice between a work truck that gets 12 mpg and one that gets 30 mpg, where all other features are the same, a business or an individual will take the one that gets higher mpg because it already benefits them.  Doesn’t matter if it’s $4/gallon or $2/gallon.  If given the choice between a performace car that gets 15 mpg and one that gets 35 mpg, other factors being the same, they’ll take the one that gets 35.  It still benefits them.

Some DC thug hitting them with yet another tax to tell them what to buy is only a good idea if you’re in favor of the DC thug hitting them with another tax.

Sorry, Chuck, the reason why people oppose it is because they understand it.

OPEC’s “Weaponized” Oil Prices

Posted: January 12, 2015 by ShortTimer in Economics, Energy, Middle East

Despite discussing the potential for a bust a couple days ago, I’m not worried about the sky falling yet:

If there ever was doubt about the strategy of the Organization of Petroleum Exporting Countries, its wealthiest members are putting that issue to rest.

Representatives of Saudi Arabia, the United Arab Emirates and Kuwait stressed a dozen times in the past six weeks that the group won’t curb output to halt the biggest drop in crude since 2008. Qatar’s estimate for the global oversupply is among the biggest of any producing country. These countries actually want — and are achieving — further price declines as part of an attempt to hasten cutbacks by U.S. shale drillers, according to Barclays Plc and Commerzbank AG.

See, there’s also the fact that Russia was their primary target:

Vladimir Putin faces a catastrophic shortfall of at least $80bn (£51bn) in oil export revenue over the next year, after Opec kingpin Saudi Arabia signalled there will be no easing in the price war it has launched to recapture market share.

According to US Energy Information Administration (EIA) figures, oil and gas shipments accounted for 68pc of Russia’s total $527bn of gross exports in 2013, when Brent crude – comparable to Russian Urals – traded at an average of $108 per barrel.

US frackers are the secondary target.

And it will take a while to crush them all.

breakeven oil prices bus insdr

Those are older breakeven prices.  There are other figures that say numbers are closer to $50 for Bakken and Permian, and as low as $28 for Marcellus.  Technology has gotten better, American ingenuity has made this development possible (in spite of the current administration), and provided investors don’t totally lose their minds, it would be possible to ease off production while letting the Saudis basically support broader US economic interests due to reduced energy costs.

OPEC thought it had a monopoly.  It didn’t, and now it’s cutting prices to force out the upstart.  Except the upstart doesn’t have to stop, it can just hold those resources as a threat that will ultimately drive the price down for everyone.

I think the only way there will be a true bust is if the US government gets involved.  If it leaves US energy interests alone, they’ll reallocate capital for a while (there will be regional busts where rigs are mothballed), but those rigs will go back active any time the Saudis start getting sad that they can’t buy a new Rolls every month.  They’ll also be there to come back online if the Saudi’s export of Wahhabism that eventually spawned ISIS comes back to bite them in the ass, as the world will look for a more reliable source of oil.

FOX 10 Phoenix, from Legal Insurrection & Jawa Report:

After shooting an unarmed man in a use of force scenario:

“It’s hard to make that call.  It shakes you up.”

Learning has occurred.  Hopefully it will stick with him.

Hopefully just a leveling off and not a bust, but rigs are shutting down and going idle:

After six straight months of plunging oil prices, U.S. shale drillers have sent the clearest signal to date that they’re retreating.

Thirty-five horizontal rigs, their weapon of choice for reaching oil deposits in tight-rock formations such as North Dakota’s Bakken shale and Texas’s Permian Basin, were idled last week alone. It was the biggest single-week drop since a drilling boom touched off six years ago that propelled domestic production to the highest level in three decades and eventually helped trigger the global price war that the U.S. and OPEC find themselves in today.

The decline, the largest in a decade and the seventh in a row, threatens to halt U.S. oil production growth by slowing drilling in tight-oil plays that make up virtually all of the nation’s new output. Bending to the pressure of crude below $50 a barrel, the country’s explorers idled the most rigs last quarter since 2009.

“The message from the market, that drillers need to start changing their behavior, has now been received by the big boys in the shale plays,” Harold York, vice president of integrated energy at consulting company Wood Mackenzie Ltd., said yesterday by telephone from New York. “The tight-oil players have received the message, and they’re taking action.”

Horizontal rigs made up more than half of this week’s decline in the U.S. oil count, which fell by 61 to 1,421, Baker Hughes Inc. (BHI) said on its website yesterday. The 61-rig drop was the largest since February 1991, which also followed a tumble in prices before the start of the Persian Gulf War.

This is quite potentially the oil boom starting to go bust.  The Saudis have this as their secondary objective (behind harming Russian economic interests), and the EPA has shutting down oil rigs as their primary objective.

Gas prices are going to go back up, and idiot Republicans are arguing over how best to sneak in a gas tax and justify acting like Democrats.

It would be really, really nice if the newly elected Republicans would actually listen to voters and stop raising taxes and reduce spending.  They control both houses but are acting like they can’t get anything done – and in this case, acting like they can’t resist the “THE TIME IS NOW” Democrat argument – an argument that is meant to shut up debate.  It’s like the Republicans have forgotten they’re in charge and that they don’t have to listen to Democrat orders to have a tax collector at every gas pump taking from the citizen’s wallet.

“Unless oil prices recover, absolutely, this is the end of the drilling boom,” James Williams, president of energy consulting company WTRG Economics in London, Arkansas, said by telephone yesterday. “The total rig count should hit 1,000 by March or April, and oil production growth should be flat or declining by mid-year.”

Now, as a counterpoint, this might not actually be a bust.  It can just be a leveling-off period as the market adjusts.  A lot of the US oil resources being exploited now are being produced at lower costs than before.  Plus with the infrastructure built and the technology developed, they’re more profitable and more efficient than before.

The problem is if government interferes… as usual.  One of the reasons we have horizontal drilling for oil to begin with is because offshore rigs are driven to deep-sea locations that are prohibitively expensive, and as shown by the BP Deepwater Horizon accident, are more difficult and dangerous to operate.  Another is the limited exploration for oil on federal lands, which take up huge percentages of western states where oil reserves are located.

Now government’s looking to raise gas taxes.  The Republicans are telling us they’ll do us a favor by only raising it 12c to head the Democrats off… which is like saying “I’ll rob you for just your wallet so the carjacker won’t steal it, too.”

The bigger problem with this yet is the inability for Republicans to see that the increased growth in the last few months has been as a direct result of the fall of energy prices.  The Saudis being scared of competition (and targeting Russia) has allowed American consumers and business some immediate surplus of cash and thus productivity.  That increase in productivity also leads to an increase in tax revenue by volume.

5% growth is orders of magnitude more productive for both citizenry and government than a 12c gas tax on $2.50 gasoline, because that 12c gas tax will also reduce overall growth.

Idiotic Republicans and the Idiotic Gas Tax Hike

Posted: January 9, 2015 by ShortTimer in Energy, Republican, Tax, taxes

This could easily be titled “why I’m not a Republican”, but there are plenty of reasons for that.  This is just a big, bold, in-your-face reminder from the Republicans that they are shortsighted, inept, and not listening at all.  We tell them we’re electing them to do what the Democrats will never do – we’re electing them to stop raising taxes, to use the funds they’re already taking from us at gunpoint wisely, and to stop spending.  But they won’t.

I heard this over the weekend while listening to the news on the radio:

Sen. John Thune (R-S.D.) signaled Sunday that Republicans might be open to negotiating increasing the gas tax in order to pay for the highway infrastructure spending bill that expires in May.

In an interview on “Fox News Sunday,” Thune said that while he is opposed to increasing the gas tax, lawmakers will need to “keep all options” available when they return to Washington this week.

“I don’t favor increasing any tax,” Thune said. “But I think we have to look at all options.”

Sen. Bob Corker (R-Tenn.) had proposed cutting other taxes while raising the gas tax user fee $0.12.

The Republicans were not voted in in 2014 to raise taxes.  The entire discussion, which I heard, basically turned into Republicans saying they want a 12¢ gas tax hike.

This kind of behavior from Republicans is what drives voters apoplectic.  We said no.  We said no again.  We said a thousand times no.

And they say “more taxes”… and then hide it behind linguistic tricks and excuses.  They say the Democrats will make them do it (which is absurd as the Republicans control both houses), so it’s better to do it their way – we’re getting it anyway, may as well just boil that frog rather than toss it in the pot right away.

And now there are even more Republicans saying it:

Record-low gas prices across the U.S. have given rise to fresh talk in Washington of raising the federal gas tax for the first time in over 20 years, with leading Republicans now saying a hike must not be ruled out.

The GOP has long resisted calls from business leaders and others to boost the 18.4 cent-per-gallon tax as a way to pay for upgrades to the nation’s crumbling roads and bridges.

Yet in recent days, senior Senate Republicans have said they want to keep options open and that “nothing is off the table” when weighing the best mechanisms to pay to finance infrastructure projects.

“I just think that option is there, it’s clearly one of the options,” said Sen. Inhofe (R-Okla.), new chairman of the Senate Committee on Environment and Public Works.

Senate Finance Chairman Orrin Hatch (R-Utah) and Sen. John Thune (R-S.D.), the third-ranking Senate Republican, also said they were open to the possibility of raising the tax.

Democratic leaders in both chambers of Congress, meanwhile, declared this week that “now is the time” for an increase.

That Democrat argument “NOW IS THE TIME” is an imperative designed to shut off discussion, to end conversation, and to short-circuit reason by demanding an immediate response.  And Republicans, who now control the House and Senate, are willing to go along with it all because so many of them have the same problem Democrats do – they can’t stop spending taxpayer money.

They just refuse to stop taking money from your wallet to throw away.

The shortsightedness of this is astonishingly offensive.  Gas prices right now are low because Saudi Arabia is dumping oil on the market to hurt both Russian economic interests and to break oil & gas frackers in the United States.  The only reason gasoline is “cheap” right now is because of an artificial bubble engineered by the Saudis, and the only reason gas was on the decline before was because of frackers in the US being able to exploit resources that were opened to them 10 years ago.

Furthermore, the assertion that gas prices are “record low” is absurd.  Gas prices now are close to what gas prices were when George W. Bush was in office.  There is no “near-record” low, gas has just returned to where it would be if Obama weren’t actively trying to make energy prices “necessarily skyrocket”.  Remember, Obama’s EPA is fining oil companies for failing to adhere to a mandate to use a fuel additive that does not exist.

The Republicans who are saying they should raise the gas taxes on you the citizen because they think you won’t notice, and because it’s “cheap” right now are the kind of people I’d love to go camping with.  I’d love to get up early in the morning in the mountains where it’s cold, climb out of the tent and discuss policy with them.  I’d love to explain to them that by the same reasoning as gas taxes, that during the day since it’s “record high” temperatures, they should just get rid of their tents and blankets and sleeping bags.  Then when evening comes they can suffer from the same short-sighted asinine reasoning that’s going to be stabbing citizens in their wallets… they can freeze without cold weather gear because of believing “record high temperatures” at noon would continue and that no one would feel the loss of some material wealth during more pleasant times.

Not really much of a surprise:

LOS ANGELES (CBSLA.com) — The Department of Motor Vehicles expects big crowds on Friday, the first day undocumented immigrants in California can officially apply for a driver’s license.

The DMV has hired more than 1,000 workers and opened four new centers to handle the rush.

The new law allows undocumented immigrants to apply without the fear of being deported, which has long been a concern in the community.

They’re not “undocumented”, they’re illegal.  The “community” is a community of criminals who’ve broken the law and are now being aided by the state of California.

The whole state is in violation of federal immigration statutes 8 USC 1327 and 8 USC 1324.

Today I heard the argument repeated (Bob Beckel on The Five) that illegals should be granted driver’s licenses, because they’re driving illegally anyway, and that way if they just get driver’s licenses, supposedly they’ll get insurance, too.  Thus if you’re a legal US resident or US citizen and you get hit by an illegal alien in traffic, rather than have them be uninsured and have to deal with an uninsured illegal alien driver, they’ll be insured and that will make your life better.

The horrible fallacy in that is that if the law is enforced and they are deported, they won’t be there to hit you with their car in the first place.

It’s also one more trick to allow illegals to vote in US elections by giving them state-issued ID cards.  Of course, places they don’t check ID, they vote already anyway…

Merry Patrick Swayze Christmas

Posted: December 25, 2014 by ShortTimer in Humor, Music

It is a standard.