Oil companies are not gouging

Some facts about oil and money at ExxonMobil Perspectives.

ExxonMobil’s earnings are from operations in more than 100 countries around the world. The part of the business that refines and sells gasoline and diesel in the United States represents less than 3 percent – or 3 cents on the dollar – of our total earnings. For every gallon of gasoline, diesel or finished products we manufactured and sold in the United States in the last three months of 2010, we earned a little more than 2 cents per gallon. That’s not a typo. Two cents.

Taxes are much more than that. Governor Molloy in Connecticut wants to add another 3 cents to his state's 25 cent per gallon gas tax. Gas is cheaper in Rhode Island, and cheaper yet in Massachusetts, but most Connecticut residents don't live close enough to a border to make it worthwhile to cross over just for cheaper gas.

Read the Perspectives post, and this one at Power Line, which adds some commentary. Higher energy prices are part of the Administration's plan to Win the Future. WTF!

Evil mutant rises from the dead ...

… to threaten industry and prosperity. First, it was Waxman-Markey; then it was Boxer-Kerry; now it's Kerry-Lieberman; but it's all cap 'n' trade.



Left to right, Kerry, Obama, Lieberman. Al Gore is out of the frame.

If it passes, it will be the American economy that's the zombie. But the Chicago Carbon Exchange will be doing fine.

Billions of 1099 forms

Lunacy in Washington, sheer lunacy. Via Reynolds, TaxProf quotes CNN:

CNN: ObamaCare's Massive, Hidden Tax Change

An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork.

Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.

The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.

Right now, the IRS Form 1099 is used to document income for individual workers other than wages and salaries. Freelancers receive them each year from their clients, and businesses issue them to the independent contractors they hire.

But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.

The bill makes two key changes to how 1099s are used. First, it expands their scope by using them to track payments not only for services but also for tangible goods. Plus, it requires that 1099s be issued not just to individuals, but also to corporations.

Taken together, the two seemingly small changes will require millions of additional forms to be sent out.

TaxProf has more links. Warren Meyer has a post: Horrible New Paperwork Requirement Slipped into Health Care Bill.

In the email this morning:
I guess we had to pass the bill to find out what was in it.

I wonder who inserted this provision, and what in the world it is supposed to have to do with health care or health insurance, or anything but destroying the private sector.

As if taxes weren't high enough already

Now the IRS wants to make tax preparation services more expensive, by requiring licensing and continuing education for preparers.

Update (via Reynolds): IRS Commissioner Does Not Do His Own Taxes Because of Complexity of Code.

Laffer on taxes and monetary policy

In the WSJ.

The damage caused by high taxation during the Great Depression is the real lesson we should learn. A government simply cannot tax a country into prosperity. If there were one warning I'd give to all who will listen, it is that U.S. federal and state tax policies are on an economic crash trajectory today just as they were in the 1930s. Net legislated state-tax increases as a percentage of previous year tax receipts are at 3.1%, their highest level since 1991; the Bush tax cuts are set to expire in 2011; and additional taxes to pay for health-care and the proposed cap-and-trade scheme are on the horizon.…

My hope is that the people who are running our economy do look to the Great Depression as an object lesson. My fear is that they will misinterpret the evidence and attribute high unemployment and the initial decline in prices to tight money, while increasing taxes to combat budget deficits.

Depends on whether "the people who are running our economy" have prosperity as a goal.

Tyler Cowen on Obamacare

How to write about legislation that is not really there? The Democrats' health reform bills will not have a definite form until after they are passed in both houses and go through reconciliation. But one has to try.

How an Insurance Mandate Could Leave Many Worse Off

AMERICANS seem to like the idea of broadening health insurance coverage, but they may not want to be forced to buy it. With health care costs high and rising, such government mandates would make many people worse off.

The proposals now before Congress would require just about everyone to buy health insurance or to get it through their employers — which would generally result in lower wages. In other words, millions of people would be compelled to spend lots of money on something they previously did not want, at least not at prevailing prices.

Estimates of this burden vary, but for a family of four it could range up to $14,000 a year over the next decade, according to the Congressional Budget Office. Right now, many Americans take the gamble of going without insurance, just as many of us take our chances with how much we drive or how little we exercise.

The paradox is this: Reform advocates start with anecdotes about the underprivileged who are uninsured, then turn around and propose something that would hurt at least some members of that group.

The Times does not see fit to link to Prof. Cowen's blog, Marginal Revolution.

Pournelle: "Authority to accomplish the impossible implies absolute power."

An aphorism is born. I hope Dr. Pournelle won't mind if I quote this whole passage.

That is a world-level statement

Mr. Pournelle,

"Authority to accomplish the impossible implies absolute power" is an eye-opening statement. It is very good. You might want to spread it around. Much like that "power corrupts" statement.

Nathan Okun

Thank you. On reflection, perhaps the principle deserves some kind of title analogous to Pournelle's Iron Law of Bureaucracy, but I haven't thought of a suitable name yet. It does hold up to inspection. The statement was that just as in logic a false statement implies the universe class, in human affairs authority to accomplish the impossible implies absolute power, and that does seem true enough.

And now the House has passed perhaps the worst bill in its history, 1,000 pages that no one had read giving enormous regulatory power in pursuit of the impossible. The actual effect of US adoption of cap and trade on climate is essentially nil. China and India will continue to burn coal and oil as they industrialize. CO2 levels will continue to rise. Global temperatures will continue to rise. US self destruction may affect the global temperature in the year 2100, but I know of no theory that can show the effect will be greater than 1 degree C (that is, global temperature would be 1 degree C less without US contribution to CO2) and that is a very extreme limit; few of the theories show our contribution to be large enough to have that much effect. The most likely outcome is an enormous hamper to US economic recovery and no effect whatever on global temperature.

The President speaks of this as a jobs bill. The cost of each job created by this is enormous. Economic growth and energy cost have a high negative correlation and always have, and this is an energy tax; it will raise the price of energy, whatever else it does. Nearly all "green" energy produces energy at a cost great than the equivalent of $150/bbl oil.

Whom the gods would destroy, they first make mad.

Indeed. Dr. P. understates the number of pages in the bill, but that number was changing so fast, it's a trivial error.

Elsewhere, tangentially to a note about the unwillingness of alarmist modelers to share their source code, Dr. Pournelle notes a distressing possibility:

[T]he charges of "Climate Change Deniers" continue to circulate, while the number of falsifiable hypotheses from the consensus group does not increase. The very nature of science may be at stake: consensus as more important than falsifiability.

Though of course science has always suffered from the problem of consensus. Cases in point, Semmelweis, Wegener.

Evil mutant succeeds in first battle!

Forces of Truth, Justice, and The American Way have not prevailed.

Waxman-Markey passed in the House, 219 to 212.

Watts Up With That has the vote, and a video from the ridiculously brief debate.

More at Ace of Spades.

Michelle Malkin liveblogged the debate, Part 1, Part 1.1 (looking forward), Part 1.2 (sidelight on the relative importance of Michael Jackson's death), Part 2, Part 2.1 (sidelight on Barney Frank, and the bill's implications for financial regulation), and Part 3, the vote.

It's not a bill, it's a concept! I mean, it really is not a bill. Details will be filled in later. So they didn't know what they passed because they had not read it, and because it was not there to read. Both at once! There is some serious dereliction of duty going on here.

ABC needs a new logo today

And Theo Spark has it.


Here's a collection of ObamaCare links from The Corner, ObamaCare Cometh.

And Rep. Paul Ryan, interviewed on CNBC this morning, talks about the tax hikes that will be needed to pay for it all. He mentions a VAT as a possibility. Thanks to Katherine Jean Lopez at The Corner, who also quotes this statement:

The House Democrats’ proposal is being sold as one that contains costs, gets a grip on our entitlement crisis, and allows those that like what they have to keep it. Yet again, the gap between what they are saying and what they are doing is nothing short of astounding, as what they’ve actually put forward would impose trillions of dollars in new spending, taxes, and debt, would create a new open-ended entitlement, and would force millions of Americans to lose the coverage they currently enjoy. Despite promises and pledges of fiscal responsibility, the Democrats don’t even pretend to level with the American people on who they plan to tax to pay for their proposals.

The Democrats’ proposal concludes that we are not spending enough on health care in America. We already spend over two-and-a-half times more on health care than any other country. Rather than add trillions more on top of that, let’s take the money we already spend on health care, and spend it more efficiently, more effectively. With the Patients’ Choice Act of 2009, my colleagues and I have proposed to do just that. We show that we can achieve universal access to quality, affordable health care in this country – regardless of preexisting conditions – without the government taking it over and without spending, taxing, or borrowing trillions more dollars.

While the Majority may wish to ignore these innovative, patient-centered solutions, the American people will begin looking for alternatives the more they learn about what Democrats are trying to rush through Congress.

"Democrats don’t even pretend to level with the American people …" Just what I was thinking while watching the President's press conference yesterday. There's some discussion of this at Althouse, kicked off by a question from Theo Boehm, "Is it possible to describe in a word or short phrase Obama's technique of pretend-reasonableness? I know what he's up to, and I'm sure most of you do too, and have encountered it in everyday life."

Obama reveals tax increases

TigerHawk, in The audacity of tax: As bad as you thought they would be, calls the proposals "hideous." It's not just that rates are going up. There will be rates in places where there never had been rates before, and reporting requirements that never had been required before. All the Joe the Plumbers in the country will need to spend more time with paper work, less time with pipes. That will lower productivity of everything but paperwork. It will even lower productivity of tax revenue, by applying a reverse Laffer Curve.

Now we see what the doubling of the tax-enforcement funding is all about. An IRS agent (or at least an audit) for every taxpayer! Other than the Nomenklatura, who will cheat on their taxes and receive Cabinet appointments.

If the main goal of the Obama administration is to fight global warming by reducing America to Haiti's level of prosperity, while sequestering large amounts of carbon in filing cabinets, these proposals are a good start.

Fannie and Freddie want some more

Funny how billions just get lost in the trillions being tossed around in Washington.

Media Still Covering Up The $400 Billion Fannie And Freddie Scandal (FNM, FRE)

This morning, Fannie Mae (FNM) announced that it had lost another $23 billion in the quarter, and would have to call down $19 billion more in taxpayer support. It also said that it would face losses as far as the eye can see.

Do you know how much we've committed to backstopping Fannie and its partner-in-crime Freddie Mac (FRE)? $400 BILLION! Back in February that was doubled from the original $200 billion.

They just won't quit. Thanks to Glenn Reynolds.

The human mind simply cannot encompass numbers that big. Bill Whittle takes a stab at it in this PJTV video, "Mountains of Money." Still, boggle is about all that one can do. The politicians who are slinging this money around like spaghetti at a food fight do not comprehend the numbers, either. The difference between them and normal human beings is that they don't even try to comprehend, so they don't boggle!

This could begin in Washington

Reuters:

Obama seeks to double tax law enforcement budget

President Barack Obama proposed on Thursday nearly doubling funds to enforce U.S. tax laws next year, with an aim of more than quadrupling funding for tax compliance to $2.1 billion within five years.

Considering the number of tax cheats in Congress, and the high number of Obama appointees with tax troubles, it would make more sense to start looking for better compliance close to home. Just a few extra bucks for the Washington bureau might bring in a fair amount.

Related, at Inside the Asylum: Cuba: Obama got it wrong; Iran: Obama got it wrong; now … the Netherlands: Obama got it wrong.