An Emergency Energy Rebate?
November 19, 2008
I just read about an idea proposed by President-Elect Obama called the $1000 Emergency Energy Rebate on Five Cent Nickel, and I hope to goodness that it’s just an idea that dies on the vine:
While a great many Americans have been focusing on the possibility of another stimulus check, the $1000 Emergency Energy Rebate has been flying a bit under the radar. In case you’re not aware, President-Elect Obama has floated the idea of enacting a windfall profits tax on “excessive oil company profits” in order to fund an immediate $1,000 emergency energy rebate for American families.
When will this end?
I am not at all a fan of this idea because as Nickel pointed out, the companies affected would probably pass on the windfall tax’s cost to the consumers. Probably! And in all likelihood, the price hikes would benefit the oil companies in the long run because I don’t see them lowering rates sans legislation which would, of course, be at further cost to taxpayers. The idea of playing Robin Hood works better in fiction than as a form of government. (I’m reminded irresistably of Monty Python at the moment.)
I’m not moneyed, by any means, to fear for my pocketbook at the income levels that are most usually targeted by the take-from-the-rich theory, and I’m not all about pitying the corporation. The effects of failing corporations on the individual is awful and understandably evokes the need to do something. It’s just that the proposed solutions don’t seem to be more fleshed out than throwing money we don’t have at the problems. It’s frustrating that “bailout” is on the tip of so many tongues when addressing complicated problems. I’m a thousand percent more in favor of creating an environment that is more amenable to making my own way than one in which my hardships are alleviated by a savior. And that’s with a sick mother, a non-income producing father, and problem brother. I would still rather earn my way despite my own difficulties, illness, and lack of advantages than rely on someone to provide for me from the pocket of someone who had more than I by hook or by crook, by the sweat of their brow, or by virtue of the right relatives. I don’t claim to be better than anyone because of that, it’s just that ultimately the underlying issues aren’t addressed and creates a long term environment in which there’s not much incentive for anyone to do quite well when every solution starts and ends with: take taxpayer money, give it to the floundering.
Maybe it’s bailout fatigue.
Yeah, that’s nuts. As oil demand is very inelastic most of a tax on oil gets passed onto consumers. Now this is a surtax on profits so the effect might be a bit different. Not sure.
Also a great way to discourage investment in new energy sources is to tax energy firms that make “too much money” with an extra tax. On the other hand I’m all for charging oil companies a reasonable royalty for access to resources.
moom: I suspect that it’ll only be different if the approach is radically different from what’s being sold in the news.
On both micro and macro levels, levying a punitive tax solely based on a company’s success/profits is a good way to stifle growth and innovation. Cost of access to resources, which would be accounted for in operational overhead, sounds like a different animal.