Feeling pain at the gas pump? Congressman Dennis Kucinich thinks he has a solution: Tax “unreasonable” oil company profits. The Ohio Democrat has introduced the Gas Price Spike Act, which he claims will “reduce the price of gasoline” by confiscating part or all of an oil company’s profits that exceed an amount deemed “reasonable” by a panel of unelected bureaucrats.
Under Kucinich’s proposal — which currently has five cosponsors, all Democrats — a Reasonable Profits Board consisting of three presidential appointees would arbitrarily decide what constitutes a “reasonable profit” for “the sale in the United States of any crude oil, natural gas, or other taxable product.” Then, if a company’s profits exceed the board’s magic number, those “excess” profits will be taxed on a graduated scale ranging from 50 percent (for profits that exceed the “reasonable profit” by no more than two percent) to a full 100 percent (for profits that exceed the “reasonable profit” by five percent or more). The revenues raised would then be used to provide tax credits for the purchase of fuel-efficient vehicles and to subsidize mass-transit fares.
The plan is, of course, hardly constitutional. The federal government is certainly not empowered to determine what a privately owned company’s profit level should be — nor to confiscate “excess” profits.
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