El Opinador Compulsivo

Luis, Víctor... podrían mandarme catálogos de Quebec y Houston... Me parece que con iniciativas como esta en los ballots en California, es hora de considerar una mudanza...

California's Bottomless Tax Well
October 23, 2006; WSJ
California already ranks as one of America's five most taxing states, but if liberal activists have their way the Golden State will soon be competing for Number One. Having voted to raise the top income tax rate on the rich two years ago, Californians are this year being confronted with a slate of new ballot propositions to raise levies on motorists, smokers and property owners.

The jewel in this liberal crown is Proposition 87, which would raise taxes on oil extracted from California by 1.5% to 6%, depending on the price per barrel -- all in the name of reducing energy consumption and dependency on foreign oil. Let us run that by you again: The idea here is to tax California oil in order to get Californians to use less Saudi oil. Brilliant.

If approved, the law would raise costs on California's oil producers by as much as $4 billion over the next 10 years. California would overnight become the state with the highest tax on oil producers in the U.S. -- which makes as much sense as Vermont levying the highest tax on maple syrup. Not one penny, by the way, would go to close Sacramento's enormous government debt burden -- which may rise by another $40 billion if the multitude of bond initiatives for new public spending are also approved by voters this November.

Instead, the revenue would finance a new state agency, the Energy Alternatives Program Authority. The new energy authority would be responsible for passing out multi-million dollar checks to projects researching alternative energy. If you think corporate welfare is out of control in Washington, wait until Sacramento politicians start passing out these billions in subsidies.

A Law and Economic Consulting Group (LECG) analysis concludes the bill would in fact increase dependency on foreign oil because the tax increases the price only on domestic oil. Meanwhile, to make it seem as if the tax will be paid by "greedy" energy companies rather than voters, Proposition 87 would make it illegal for producers to pass on the tax costs to consumers. But wait. The "Yes on 87" lobby also claims that the law would reduce California oil consumption by 25%. How does a law that doesn't allow the retail price to rise reduce gasoline consumption? These are logical niceties that no one much cares about when fads are in season -- and taxing energy is the biggest fad of them all these days.

Former President Bill Clinton is starring in a pro-87 TV ad that began running last week. Al Gore is raising money for the initiative, alongside Hollywood economists Geena Davis and Julia Roberts. Its main financial supporter is Hollywood producer Stephen Bing, who is also rich enough not to care about any increase in energy prices; his $40 million contribution is believed to be the largest individual donation to a ballot initiative in history. One co-chairman of the initiative, Vinod Khosla, a venture capitalist, has contributed $1 million to the campaign. Mr. Khosla happens to own an ethanol plant outside of Fresno -- just the operation that, who knows, might be eligible for funding from this new energy welfare fund.

The biggest impact of Proposition 87 would be to make California oil relatively more expensive to produce than Saudi, or Venezuelan, or Canadian oil. So if 87 passes, Californians will be approving the equivalent of a tariff on their own oil. So the tax would actually make America slightly more, not less, dependent on foreign oil. This is an energy plan that only Venezuelan strongman Hugo Chavez could love.