Friday, February 15, 2008

More Bad Ideas on Energy Policy from the Democrats

Paul Mirengoff of Power Line Blog writes in a post titled Not serious about energy policy either that the Democrats' proposals on energy policies would actually increase US dependency on foreign oil and increase the cost of energy for American consumers.
In a post below, John shows once again that congressional Democrats are not serious about national security. They would rather pander to their radical base and, it would appear, to their trial lawyer financiers than authorize measures through which the government can obtain the intelligence needed to fight terrorism.

As Ben Lieberman of the Heritage Foundation demonstrates, the Democrats aren’t serious about energy policy either. Both gasoline prices and oil company profits are high. Thus, House Democrats propose to raise taxes on oil companies. But, according to Lieberman, oil companies already pay their fair share of taxes. In fact, their effective tax rate of 37 percent is slightly higher than that of large corporations in general.

More importantly, the proposed tax hike would tend to produce even higher gasoline prices. It would do so in part by discouraging investment in new domestic drilling for oil and natural gas, thereby tending to decrease supply as demand continues to grow. In addition, any new tax on gasoline, whether at the pump or at the producer level, will raise the cost of this product to consumers. Furthermore, says Lieberman, the Democrats’ proposal would undermine our energy security by providing a competitive advantage to OPEC and other non-U.S. suppliers whose imports are not subject to most of the bill’s provisions.

The Democrats should understand this. As Lieberman reminds us, they tried something very similar in 1980. during the Carter administration, when they imposed a “windfall profit tax” on oil companies. According to the Congressional Research Service, this tax “reduced domestic oil production from 3 to 6 percent, and increased oil imports from between 8 and 16 percent.”

To make matters worse, the Dems would use the new revenue generated from the tax increase to subsidize alternative energy sources such as wind and solar power. Lieberman notes that, even after decades of tax breaks, alternative energy provides only a small fraction of America’s energy needs. Solar energy, for example, provides only 3 percent of our electricity due to its high cost and unreliability. And the Department of Energy estimates that the overall percentage of electricity attributable to renewable sources is not likely to increase even by 2030. In short, the forms of energy the Democrats want to subsidize are the sources of the future, and likely always will be.

The federal government has a dismal record of picking winners and losers among energy sources. Yet the Democrats persist in seeking to raise taxes on what works and subsidizing what doesn’t. They simply aren’t serious.
The policies of the Democrat party nearly always make the problems that they complain about worse than if their policies were to not become law. They complain about corporate "outsourcing," yet they advocate policies that could convince many corporations that the United States isn't a good place to do business.

The Democrats appeal to emotion over reason time after time.