Extend the Bush Tax Cuts

On 1 January 2011, the Bush Tax Cuts are set to expire and there is fierce debate whether or not to extend them. These tax cuts, despite what the liberals say, are not solely focused on “the rich”. The reduction in tax rates brought us out of the 2001 recession and contributed to the economic growth, starting in 2003. However, due to the media’s amazing work (sarcasm), people really don’t know what the 2001 and 2003 tax cuts actually did. But, that’s why I’m here.

Many people on the Left wrongly blame the current recession on the Bush Tax Cuts. They say our budget problem came from these tax cuts “for the rich”. However, as seen in this chart , the immense deficits we are facing come from excessive amounts of government spending, mainly in entitlement programs like Social Security, Medicare, and Medicaid. Meanwhile, instead of reeling in this out of control spending, in the past year, our federal government has increased the budget deficit four times the amount it was in the last fiscal year. Continue reading “Extend the Bush Tax Cuts”

Obama Drops Windfall Profits Tax

In an act that further proves that Obama believes there is such a thing as too much success he decided to drop his famed windfall profits tax proposal.

Now, right now you might be saying “But CP (College Politico), dropping a proposed tax is a good thing and encourages success”. To which I would reply “yes, awesome and intelligent reader, that is true but its not the fact that he dropped the tax proposal which proves he thinks a person or company can be too successful but, rather, its the reasoning behind it.

You see, Obama has decided to drop the tax not because Oil companies have lowered their profit margins but instead because the price of oil has fallen below $80 a barrel.

So, while oil companies are still making the same percent profit they were when oil was at $140
a barrel somehow their profits are no longer considered “windfall”. In other words, oil companies are operating in the exact same fashion they were when Obama called jumped on the “windfall” tax bandwagon but somehow they were taking advantage of us then and now they aren’t.

Right, I think I got it now… oh wait, I’m sorry, I can’t understand it because it is absolutely absurd!

Of course the windfall profits tax was always absurd because the oil industry has one of the smallest profit margins (about 8%) of any industry in the world (I’ve seen reports that Google has up to a 50% profit margin for some of its online advertising but nobody is calling for a Google windfall tax). And it would still be absurd even if the oil industry had the largest profit margin because the industry is not a monopoly but is made up of many competing companies and, so, if people choose to buy from a company with a 50% profit margin instead of the company with a 10% or 5% profit margin how is the company at fault? If customers are willing to pay the price set by the seller then the seller cannot be at fault.

In fact, the only way a seller can get away with price gouging and windfall profiteering is if they are monopolies devoid of competition. And, furthermore, the only way a monopoly can form is if the government either allows it to or, and this is far more likely, actively creates it. So, if Mr. Obama is truly concerned with “windfall” profits he ought to direct us away from our current slide down the socialist slope and back towards a steadfast commitment towards free market capitalism.

UPDATE: Hot Air and Malkin chime in on this issue with quite interesting points