The Absurd Report

No matter what your political affiliations are when Congress’ actions become self-defeating for all Americans you have to wonder if they are void of all ‘common sense.’

First of all these so-called proclaimed genius on Capitol Hill DO NOT understand how a free economy works, if they did they would never pass punitive legislation against American energy companies that provide the fuel which generates this economy.

My first example comes from an excerpt from IBD Editorials…

Tax Cut For Hugo?

Energy: If there’s anything more dumbfounding than the House’s imposition of higher taxes on oil companies, thereby guaranteeing higher prices at the pump, it’s the exemption voted for Venezuela’s state oil firm.

It goes to show that Congress is more willing to empower dictators than to get serious about America’s energy supply.

On the surface, H.R. 5321 is awful all by itself. Passing 236-182 last week, the bill scrapped the tax deduction routinely given to the major integrated oil companies — Exxon, Chevron, BP, Shell and ConocoPhillips — that helps them explore, extract, refine and market the energy that drives our economy.

This will make it $18 billion more costly for those companies to produce oil. To the House this is a good thing, because large oil companies with large market capitalizations already earn too much.

“The big five oil companies recently reported record profits for 2007, with Exxon Mobil earning $40.6 billion last year alone — the largest corporate profit in American history,” Speaker Nancy Pelosi said Friday. “While oil company profits have quadrupled, high energy prices continue to squeeze American families.”

Don’t worry, the $18 billion will still be spent. It’ll just be turned into pork for so-called alternatives and renewables that thus far have failed to produce energy in a free market.

Congress made this even worse by ensuring that its discrimination against the big oils would benefit Citgo, which happens to be owned by those same companies’ worst tormentor abroad — the brutal leftist dictatorship of Venezuela’s Hugo Chavez.

Under this bill, the dictator’s oil subsidiary keeps its 6% deduction for U.S. domestic manufacturing — the one the American oil companies lose — because Citgo, technically, buys from Chavez.

How’s that for logic? Worse, the bill includes distorted incentives that will do exactly the opposite of what Congress intends.

• By taxing big oil companies, Congress gives them less cash to develop new sources of supply that would bring these prices down. America’s large integrated oil companies are profitable, but they also are the biggest spenders on exploration and R&D technologies. They have the greatest capacity to reach into the earth’s remotest regions to produce energy; now, they’ll do less of that.

• The bill will force these five companies to pass $18 billion in costs on to buyers. Energy companies, like all private enterprises, don’t eat new taxes — their consumers do. We’ll pay at the pump.

• Meanwhile, U.S. oil companies will have a long-term incentive to locate operations abroad, if only to match the advantage enjoyed by companies such as Citgo. When that happens, America will be more dependent than ever on the whims of foreign petro-tyrants like Chavez.

“The Democrats’ blustery rhetoric on energy couldn’t be more wrongheaded or insulting,” one angry GOP House aide told IBD. “Raising taxes on producers of American energy here at home will only send good-paying jobs overseas, further increase our dependence on foreign oil and make gasoline even more expensive.”

Last year, by the way, Venezuela confiscated assets worth about $6 billion from all five of these same American companies.

Congress seems unmoved by the attack on U.S. companies’ sovereignty. Exxon executives recently charged that Congress’ rabid rhetoric against American oil producers had undermined their efforts to reason with Caracas.

With this bill, Congress only shows its unwillingness to face up to reality. While it passed the House, there’s still hope that it will die in the Senate. If not, President Bush vows a veto.

Such boneheaded legislation, however, should never have been introduced. At a time when we’re trying to stave off recession and bring down the record-high price of crude, Congress is only making matters worse by casting U.S. companies as the enemy.

My second example comes from an excerpt from CNN.com…

Speaking at a news conference, Colombian Gen. Oscar Naranjo said evidence in three seized computers also suggests Hugo Chavez gave FARC $300 million to fund their rebel actions against Colombia.

Naranjo said other evidence in the computers suggests FARC purchased 50 kilograms of uranium this month.

“The revelations about agreements between the terrorist group FARC and the governments of Ecuador and Venezuela will be submitted to the Organization of American States and the United Nations,” Uribe’s communique said Monday.

And who is FARC?

Established in 1964 as the military wing of the Colombian Communist Party, the FARC is Colombia’s oldest, largest, most capable, and best-equipped Marxist insurgency. The FARC is governed by a secretariat, led by septuagenarian Manuel Marulanda (a.k.a. “Tirofijo”) and six others, including senior military commander Jorge Briceno (a.k.a. “Mono Jojoy”). The FARC is organized along military lines and includes several urban fronts.

Source: Global Security.org

SideBear: So when our aged hippie from San Francisco self proclaimed Queen of the House and her illiterate partisan minions of the House provides Hugo Chavez with a windfall tax break, the bottom line is they are giving Chavez more money to fund terrorists.

Theodore Roosevelt once said, “When they call the roll in the Senate, the senators do not know whether to answer ‘present’ or ‘guilty’.” In this case the House is ‘guilty’ of aiding terrorists!

Related

Record Profits Mean Record Taxes

Every time oil companies report strong earnings they seem to tap into a gusher of resentment on the left. One of these days the critics might look at what these businesses are contributing besides vital energy.

Consider the magnitude of the contributions from Exxon alone.

On those “outlandish” 2006 profits, the company paid federal income taxes of $27.9 billion, leaving it with $39.5 billion in after-tax income. That $27.9 billion was more than was collected from half of individual taxpayers in 2004.

In that year, 65 million returns — which represent far more than 65 million taxpayers because of joint returns — paid $27.4 billion in federal income taxes. And those taxes were paid on adjusted gross income of $922 billion, according to IRS data, yielding an average tax rate of 2.97%.

This year, according to Mark Perry, the economist who made this striking observation on the Seeking Alpha Web site, Exxon will pay $30 billion in taxes, at a 42% rate, leaving $40.6 billion in profit.

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free economy, higher taxes on oil companies, Exxon Mobil, Nancy Pelosi, Venezuela’s Hugo Chavez   

Tags: Economy, National Security

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