Six House Democrats, led by Rep. Dennis Kucinich (D-OH), are moving to create a "Reasonable Profits Board" to control gas profits.
“The Democrats, worried about higher gas prices, want to set up a board that would apply a ‘windfall profit tax’ as high as 100 percent on the sale of oil and gas, according to their legislation,” writes Pete Kasperowicz of The Hill.
“The bill provides no specific guidance for how the board would determine what constitutes a reasonable profit.”
Is that surprising?
Kasperowicz explains how it would work:
The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale of oil and gas that ranges from 50 percent to 100 percent on all surplus earnings exceeding "a reasonable profit." It would set up a Reasonable Profits Board made up of three presidential nominees that will serve three-year terms. Unlike other bills setting up advisory boards, the Reasonable Profits Board would not be made up of any nominees from Congress.
Translation: the president would hand pick who he wants to decide what constitutes a “reasonable profit.” No congressional oversight. No voting.
The bill makes sure to exclude industry representatives from the board, as it says members "shall have no financial interests in any of the businesses for which reasonable profits are determined by the Board."
According to the bill, a windfall tax of 50 percent would be applied when the "sale of oil or gas leads to a profit of between 100 percent and 102 percent of a reasonable profit.”
“The windfall tax would jump to 75 percent when the profit is between 102 and 105 percent of a reasonable profit, and above that, the windfall tax would be 100 percent,” the report says.
Of course, and to no one’s surprise, the bill also states that the oil-and-gas companies, as the seller, must pay this tax.
But here’s the clincher: Rep. Kucinich said these tax revenues would be used to “fund alternative transportation programs when oil-and-gas prices spike.”
"Gas prices continue to rise, creating a hardship for the American people," Kucinich said. "At the same time, oil companies are making record profits gouging their customers. This bill would tax only the excess profits and create forward-thinking transportation alternatives."
Specifically, he said the money would be used to fund a tax credit on the purchase of fuel-efficient cars and set up a grant program for mass transit programs when oil-and-gas prices are high.
Oddly enough, the bill does not estimate the size of these grants or the amount of revenues that might be collected through the tax.
Co-sponsoring the bill are five other Democrats:
- Rep. John Conyers Jr. (MI)
- Rep. Bob Filner (CA)
- Rep. Marcia Fudge (OH)
- Rep. Jim Langevin (RI)
- Rep. Lynn Woolsey (CA)