Senator Dick Durbin wants to impose a tax on U.S. oil producers, just at the time when they are struggling to get Gulf Coast gas and oil production and refining restored after being hit by two hurricanes. The plan by Senator Dick Durbin would impose a 50% tax on the difference between the market price of oil and a bench-mark of $40 a barrel.
The result will be to raise $40 billion or so a year based on a price of $63 per barrel. This will retard the post-hurricane recovery of the U.S. oil industry and put a dead hand on future exploration in the United States. That, in turn, will keep the world price of oil at a level higher that would prevail otherwise and retard domestic economic growth. It will also provide more revenue for foreign producers like Saudi Arabia and Iran. I worry about how that extra revenue will be spent by the sheiks and ayatollahs.
I know where the extra U.S. tax revenue will go. Senator Dick Durbin has told us. It will go to expand political support from constituencies that favor Democrats.
That makes Senator Dick Durbin the champion tax and price gouger of all time, and the best friend Saudi Arabia and Iran ever had.
Jim Johnston ([email protected]) is a Senior Fellow with the Heartland Institute and is also on the Board of Directors.