It’s been said that Kalifornia is the state that starts all trends in this country. Rather than being called the “Golden State”, based on the history involved, I think we should be called the “Bellwether State”. That’s unfortunate for those of you who don’t live here, because there’s another nutty idea coming down the freeway (instead of the “pike”, as it’s known in many of the more rational areas of the country).
In taking another look at some of the proposals coming up in this year’s elections at the website of the Secretary of State, I’ve come upon another doozy: Prop 87.
You can see it for yourself here, at the official website:
Then scroll down to Prop 87. The official title of this little gem is:
ALTERNATIVE ENERGY. RESEARCH, PRODUCTION, INCENTIVES.
TAX ON CALIFORNIA OIL PRODUCERS.INITIATIVE CONSTITUTIONAL AMENDEMENT AND INTITIATIVESounds great. But what does it mean? Hint: Notice the key word: TAX.
Fifteen words in the title, fourteen of which are irrelevant, because of the fifteenth: TAX.
Some background: California is a fairly oil-rich state. We’ve been producing crude for decades. Of course, much of the current potential production lies in off-shore fields, which can’t be developed because it might spoil the view from some millionaire’s estate in Santa Barbara or Montecito or Santa Monica or… well, you get the picture. And, of course, we can’t even build new refineries to process the crude oil we’re forced to import from other sources because, well… you get THAT picture, too.
Further, Kalifornia has just about the highest tax burden per gallon of fuel (gasoline) in the nation. As of late 2005 (the latest data I could find) Kalifornia’s tax burden on a gallon of gas was 60 cents/gallon, comprised of 41.6 cents state, and 18.4 cents federal taxes. The only states I find on this chart with higher taxes are Hawaii (which has to import all its gas), and New York (home of Schumer and Clinton). Even Taxachussetts was lower! See the chart here:
Moving on, what’s the purpose of this new tax? Once you wade through all the Barbra Streisand on the title page of the document, it sets up a committee. This committee’s goal? “Reduce petroleum consumption by 25%”. How is it going to do that? Well, according to the proposal, by simply being a committee! And, of course, imposing a new tax!
This new committee, political appointees all, is accountable to no one. Sounds like a great deal to me if you’re a committee member. They have the power to reorganize or initiate “new programs” apparently without accountability to anyone, with only the most nebulous of goals mentioned, and certainly not defined.
They have the power to impose taxes on oil produced in Kalifornia according to a sliding scale that even the State’s own analyst couldn’t make sense out of. It could be anywhere from 1.5% to 6% of value, but the measure is unclear as to how this would be imposed. But it would be IN ADDITION to extant taxes. Further, any imposed taxes couldn’t, by law, be passed on to the consumer. Back to that in a moment.
So, you ask yourself, what does this mean to me? I don’t, thank God, live in Kalifornia. Here’s your answer.
Remember earlier, when I wrote that the tax couldn’t be passed on to the consumer? What does that mean to the PRODUCER of the product? Oil companies operate on a thin margin, because their profit depends on volume. Add another 1.5% to 6% tax burden, ONLY to be absorbed by the producer, and Kalifornia oil production could dry up even further, if that’s possible. The mandated adjusted selling price of Kalifornia oil, with the new taxes, would exceed any profitablitity that could be recouped by the producers in the world- or spot market, because any profit would be more than absorbed by the new taxes. That would make Kalifornia crude unprofitable to produce, which would subtract Kalifornia oil production from the domestic oil-production scene.
And here we are, a nation dependant for its energy existence on importing oil from the Middle East where our avowed enemies are located, adding even more ammunition to their fiscal arsenal.
Why, in the title, do I write “Coming to a State Near You”? Because your state is either an importer or exporter of gasoline. And if this kind of lunacy, intellectually bereft in every way, can pass here, totally ignorant of the larger issues involved, as only a “feel good” measure, in a state literally awash in oil if only we were allowed to produce it, what can happen in YOUR state? And what does this mean to our country as a whole, while we’re engaged in a War on Terrorism centered in the currently-largest oil producing region in the world?
Instead of even considering this kind of idiocy, we should be realistically looking at ways of enhancing our domestic production capacity, from developing and exploiting new fields, to bringing on-line new technologies like wind-farming, boosting our nuclear power capabilities, and expanding our refinery capacity for fossil fuels.
Instead, we are being held hostage to the environmentalist extremists.