Our future hinges on .. oil subsidies and jet loopholes?

The Obama administration wants to clarify that it definitely wants to end the Bush tax cuts, raising taxes on filthy rich American small business owners earning over $250,000 a year… it just doesn’t want to do that quite yet. Right now our Dear Ruler, Barack Obama, and the Democrats just want to target “millionaires and billionaires, oil and gas subsidies, and loopholes for corporate jets that are gifts to special interests,” according to chief dogwasher Jay Carney. He says, “This is about subsidies for oil and gas companies — $40 billion — a loophole that allows for the owners of private corporate jets to benefit enormously in the billions, compared to, say, Delta or American Airlines, and other measures that benefit millionaires and billionaires, or in some way, you know, complicate our tax code in a way that it isn’t helpful.” It’s funny how Barack Obama and the Democrats are only worried about our “complicated” tax code as it applies to wealthy folks.

Let’s start with this focus on loopholes for corporate jets. Why the focus on corporate jets? Simple .. playing the wealth envy card. There are two things that really seem to symbolize extreme wealth: yachts and private jets. Democrats tried a special tax on yachts years ago, and thousands of jobs in the boat-building industry were lost. The tax was soon repealed. So .. this time it will be the private jets. And just what hideous subsidies are the Democrats after? Depreciation. All businesses get to depreciate their capital equipment. There is nothing really sexy – nothing that can be exploited to play the wealth envy game – in taking a depreciation for a construction crane or a massive new printing press at The New York Times. Private Jets? Well that’s an entirely different matter — only rich people fly in private jets, so have at ‘em!

In reality, how much could closing the corporate jet loophole really gain the taxpayers? Well when you consider the fact that we have a $1.6 trillion deficit just this year, you’d have to be government-educated to think that this corporate jet loophole could even make a dent in that figure. The reason why Democrats are focusing on something like this is because they are pandering to the dumb masses … like this person, for example: Robert Creamer. Here’s a taste of an article he wrote for the Huffington Post:

High-end corporate jets can set you back for from $40 to $70 million. They offer huge seats, communications suites, luxury appointments — convenience that is unmatched by flying commercial. But should the other taxpayers really be subsidizing that kind of luxury travel?

If a corporation spends $40 million on a corporate jet to fly around its CEO without the hassle of airport security, and the other indignities suffered by mere mortals, is it right to require those mere mortals contribute as much as $14 million in the form of a tax subsidy for the deduction the company will take as the aircraft is depreciated over the years?

The entire article is dripping in this wealth envy attitude. The Democrats play into that because they know it works.

The other victim in the Democrat wealth-envy parade is Big Oil. So now we are back to these oil and gas subsidies. We’ve been through this charade before, and in fact, I’ve pointed you to an excellent article by Randall Hoven in the American Thinker, which gives you some of the details on these hideous subsidies … subsidies that are almost uniformly offered to all industries in this country. What makes Big Oil subsidies different and worthy of government lambasting? Nothing, other than the fact that Big Oil makes for a convenient boogie man in a sea of ignorance. OK .. for some figures:

* Domestic manufacturing tax deduction — $1.7 B. This is a tax deduction given to every manufacturer in the US. Per CNN, it was “designed to keep factories in the United States.” If that deduction were eliminated for oil companies only, it would mean singling out oil companies from all other manufacturers.

* Percentage depletion allowance — $1 B. Any industry can write down a portion of the cost of its capital equipment as part of the cost of doing business. Right now, oil in the ground is treated as capital equipment. Again, this “subsidy” amounts to how the cost of doing business is defined. All companies get it, not just oil companies.

* Foreign tax credit — $850 million. Companies get credit for taxes they pay to other countries. All companies get this “subsidy,” not just oil companies. Should a company pay tax on tax? Should only oil companies pay tax on tax?

* Intangible drilling costs — $780 million. According to CNN, “[a]ll industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.” Among these four tax “breaks,” this smallest one was the only one that treated oil companies differently.

As Randall Hoven, the author of the American Thinker article, points out … the only subsidy that is specific for the oil industry is the last one for intangible drilling costs. So $3.55 billion that the Democrats want to claim are tax credits that are offered to all industries and manufacturers in the United States. But what if Barack Obama and the Democrats get their way in these debt talks and eliminate these subsides? Is this really going to make a dent in tackling our debt? Hoven has the figures …

* The amount of earnings not collected in taxes is about $4.3 billion per year — about 0.2% of this year’s deficit and enough to fund about 10 hours of current US government spending.

The only tax in which the oil industry seems to get special treatment compared to other industries is intangible drilling costs. The amount of that subsidy? That would be $0.78 billion per year — enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreign-owned and state-owned oil company for drilling offshore Brazil.

Why Obama’s hometown has the highest gas prices in America

Think California has the highest gas prices in America? Think again. Chicago: the one party town wears that crown.

What are the consequences of living in the last of the one-party machine towns, a town that has hosted the Daley family as well as being the hometown of Barack Obama and the cronies he put in power (including Bill Daley, his Chief of Staff)? Politicians who have no problem imposing the highest gas prices in America on their citizens.

From the Chicago Tribune:

Chicago-area gas prices have been running about 50 cents per gallon more than the national average. Fifty cents doesn’t sound like much until you consider a two-car family might buy 1,400 gallons of gas a year, which siphons some $700 more from their pockets than other Americans.

The clipping of the wallet causes damage throughout the economy, as consumers have that much less money to spend on retail purchases, save for their future, invest in their children.

The main cause of the high prices? Taxes and regulations-the Democrats solution to all our problems. There is a “mind-boggling array of tax levies that get tacked on gasoline’s retail price.”

There are excise taxes (both federal and state — and actually the Illinois state tax is in-line with other states); but also taxes that are charged to fill the underground storage tank fund and environmental impact fees. But together these last two only amount to a penny a gallon.

The killer is the sales tax. Illinois is only one of seven states to charge a sales tax on gas. What makes it worse is that these taxes are not a fixed number of cents per gallon but fluctuate as a percentage of the sale. This is a recipe for compounding the damage to the consumers; as oil prices rise, so does the amount taken from Illinois drivers — at a faster rate than for others across America. The state sales tax is 6.25 percent, so the take per gallon rises as the total bill at the gas station rises.

Illinois is also unusual in that it allows counties and municipalities to also get in the action.

In Chicago, city, county and Regional Transportation Authority (for our government-run trains and buses) sales tax add a few more percent. Thank you, Democrats.

But wait..there’s more.

When you buy gas in Chicago, you pay a couple more flat taxes. The city of Chicago and Cook County not only levy sales taxes but also flat taxes of 5 cents and 6 cents, respectively. Illinois is the only state to allow all these different taxes to be levied in concert, Sykuta said.

Worsening the problem is that some sales taxes are applied on top of flat taxes, charging motorists tax on tax, which only accelerates the total cost.

“One reason for higher prices is because of the multiple layers of taxes in Chicago,” said John Felmy, chief economist at the American Petroleum Institute.

The grand total? Taxes add an average of 69 cents to every gallon of gas in Illinois, and far more in high tax areas such as Chicago. That places Illinois up with the highest gas-taxing states in the nation, along with Connecticut, 70.3 cents, and New York, 69.1 cents, according to an analysis by petroleum institute. The national average is about 50 cents.

Taxing taxes — a Democratic dream.

But wait …there are even more costs, courtesy of politicians. Chicago is required by the Environmental Protection Agency, as are most cities, to use pricier reformulated gasoline in the summer. Chicago formulated a toxic brew so unaffordable that the rest of Illinois gets to use a cheaper blend.

This boutique blend is pricier. What adds to the costs, is that the cocktail of summer gas must include a heavy dose of corn-based ethanol. Only a few refineries make this unique blend, adding more to the costs. No wonder Obama supported the ethanol industry: Illinois is the second-largest producer of corn. So this government-imposed rule was yet another sop to the ethanol industry. Since there are so few refineries in America (thanks to rules and regulations, and the NIMBY problem) an outage in any of the very few refineries that produce Chicago gasoline can cause prices to spike even when crude oil pricing is stable.

Chicago is a microcosm of what Democratic policies lead to: sky-high prices and the ever-present risk of government caused-shortages.

Obama sees benefits in high energy prices (he and his minions have repeatedly said so) –especially those that transfer money from motorists into the hands of Democratic politicians.

America, welcome to the world of Cook (“Crook”) County politics.

Guess What Israel-Haters! Israel Has More Oil Than Saudi Arabia AND, The West Bank (Gaza) Has ZERO

Guess What Israel-Haters! Israel Has More Oil Than Saudi Arabia AND, The West Bank (Gaza) Has ZERO.

Post by QV:

Just Watch: After Libya, Satan America will attack ISRAEL.

ISRAEL HAS MORE OIL THAN SAUDI ARABIA!!!!!

Libya 101

Whether you like it or not, things in Libya have gotten a little more serious. Over the weekend, US warships launched over 100 Tomahawk cruise missiles at Libya’s air-defense systems. Seems like a wildly different outcome than you may have expected from us just one week ago. So how did we get here?

The first thing that you need to understand about Libya is that it is a very rich nation; although that wealth is in the hands of the Gaddafi family, which has control over the Libyan economy. It is one of the world’s 10 richest oil-producing countries, with a fairly small population – 6.4 million people. Most Libyans (97%) are Sunni Muslims. Muammar Gaddafi has been running the show since 1969. Before that, Libya has known as the Kingdom of Libya .. yes, run by a king .. and was pretty friendly toward the West but unpopular with the people of Libya. So in 1969 while the King was out of the country, a group of young military officers led by Muammar Gaddafi staged a coup. The monarchy was abolished and the King was exiled to Egypt. Gaddafi scrapped the constitution and went on to govern based on his own political philosophy outlined in his “Green Book.” In 1979, Gaddafi resigned as the General Secretary for Libya’s Congress and decided that he was just going to run things himself .. becoming a de-facto dictator.

Are you with me so far? So this goon has been running things since 1969 and has declared himself the dictator since 1979, making him the longest-serving leader in the Arab world. So … fast-forward to 2011. We’ve got Libya sandwiched in between two countries: You’ve got Tunisia, which borders Libya on the West, and Egypt, which is on Libya’s eastern border. The people in Tunisia and Egypt decide that they’ve had enough of these totalitarian dictatorships. They revolt, they protest and eventually they kick their long-time dictators out of power. Gaddafi sees the writing on the wall …. It’s only a matter of time before people in his country want the same thing. So he decides that he isn’t going to go down without a fight. And the thing is, Gaddafi can do this. Unlike Tunisia and Egypt, there are no political parties in Libya. While elections in Tunisia and Egypt were rigged for years to keep their dictators in power, at least they had some sense of political opposition established. That’s not the case in Libya. Without Gaddafi, there really is nothing. That was until February 2011. Among violent protests, Gaddafi’s former justice minister Mustafa Mohamed Abud Al Jeleil established a national council to try and orchestrate the rebel opposition to the Gaddafi regime. All the while, Gaddafi is gunning down innocent Libyans throughout the country. As many as a thousand people have been reportedly killed by Gaddafi and his regime since the recent protests began. So the rebels are operating out of the eastern city of Benghazi – the second largest city in Libya, second only to the capitol of Tripoli. As of right now, France is the only country that has recognized this National Libyan Council as the country’s legitimate government.

While the protests and the killing have been happening for well over a month, as of just two weeks ago, the US seemed completely against any sort of action in Libya. Even just a few days ago, the US did not even want to support establishing a no-fly zone.

So what changed? It became quickly apparent that the rebel city of Benghazi was in danger of collapse. So while Barack Obama is picking out his college basketball bracket, Hillary Clinton and Susan Rice, Obama’s ambassador to the United Nations, jump into action. Hillary manages to convince the Arab League of Nations not only to support a no-fly zone but had Arab governments willing to participate in military action. Meanwhile, Susan Rice worked to get 10 nations in the UN Security Council to approve a resolution not only establishing a no-fly zone but authorizing a fuller range of options, including “all necessary measures to protect civilians under threat of attack in the country.” So by Friday afternoon, Gaddafi launched an armor assault on Benghazi. By Saturday morning, Gaddafi’s forces had reached a key bridge in Benghazi less than two miles from the headquarters of the National Libyan Council. So here we go … let’s put this “all necessary measures” to good use. On Saturday, the US launched 100 Tomahawk cruise missiles to knock out Libya’s air-defense systems and radar units near Tripoli. Meanwhile, the French launched an airstrike on the armored Gaddafi units around Benghazi.

And that brings us to today. Gaddafi says that he will arm one million Libyans with weapons “to rise up against what he called foreign aggression to occupy the country and steal its oil wealth.”

And now … the question: Is there really any compelling reason that we should be involved in this at all? Newt Gingrich has a few questions of his own:

1. Why not North Korea or Iran? Both countries are much bigger threats to the United States.

2. There are a lot of bad dictators doing bad things. Mugabe and the dictator of Sudan, for instance, have both killed more of their own citizens.

3. What is the Obama Standard?

4. How will success be defined here?

5. How far do we go to achieve that success?

6. How do we pay for this?

Gingrich refers to this as opportunistic amateurism without planning or professionalism?

End the Obama freeze on American energy development

Decisions made over the coming months by our elected officials in Washington will either allow for robust development of U.S. energy resources in the Gulf of Mexico, or they will lurch this nation one step closer toward a national energy crisis of our own making.

The massive oil spill in the Gulf of Mexico is a stark reminder of the need to pursue our nation’s energy resources in a safe, responsible way. But regulators in Washington have not been willing to recognize the seriousness with which the energy industry has responded to the Gulf spill, nor have bureaucrats in Washington acknowledged the decisive steps that have been taken to upgrade the safety equipment and procedures involved in deep-water drilling in the Gulf.

A moratorium on deep-water drilling and a shutdown on the drilling permit process has essentially frozen new energy production in a vital energy sector, which is now responsible for delivering one of every four barrels of oil that this nation consumes.

Middle East tensions and civil unrest in several Arab nations have recently pushed oil prices even higher, while countless numbers of Gulf workers and supporting businesses scattered all over the United States sit idle with no sign of returning to their jobs.

Last week, oil industry majors announced a new, state-of-the-art well containment system that is ready to be deployed in the unlikely event that it becomes necessary. This containment system provides the Gulf with a new, gold-standard capability to deal with any spill and represents a long-term commitment to the safety of the Gulf region.

Working collaboratively, and in conjunction with government officials, a team of professionals from four of the largest energy firms — Exxon Mobil, Chevron, Royal Dutch Shell and Conoco-Phillips — developed a oil well containment cap that is capable of operating in water up to 8,000 feet deep and collecting up to 60,000 barrels of liquids per day.

Read more here.

Oil Prices Skyrocket

Mounting concerns over Libya’s violent crisis weighed on stocks Tuesday and sent oil prices surging, while the earthquake in the New Zealand city of Christchurch pushed the country’s currency sharply lower.

With deep rifts opening up in Moammar Gadhafi’s regime, air force pilots defecting and a bloody crackdown in the capital of Tripoli, investors are fretting over how the crisis will end and what the impact on the North African country’s oil production will be.

Libya is the world’s 18th largest oil producer, pumping out around 1.8 million barrels a day, or a little under 2 percent of global daily output. The OPEC country also sits atop the biggest oil reserves in the whole of Africa.

With so much uncertainty surrounding a large chunk of the world’s daily oil production, market prices surged. Benchmark crude for March delivery was up $6.35 a barrel, or 7.4 percent, at $92.55 a barrel in electronic trading on the New York Mercantile Exchange.

“The Middle East will remain the market’s focus today with moves in the oil price probably the best single indicator of the market’s assessment of the wider implications of events there,” said Adrian Foster, an analyst at Rabobank International.

Rising crude prices are a particular worry for investors as they reinforce fears of inflation and raw materials costs. They also stoke worries of a big drop in global demand levels, as experienced in previous oil price shocks in 1973-4, 1979 and 2008.

Read more here.

2010’s leading state: North Dakota

The most dynamic economy in America belongs to the state of North Dakota, aka “The Peace Garden State.” The underlying reason (pardon the pun) is development of the vast Bakken shale oil deposits underway. As a result, North Dakota has the lowest unemployment and highest economic growth of any state in America.

Barbara Hollingsworth of the Washington Examiner writes:

North Dakota’s oil boom has already increased the sparsely settled state’s population by 5 percent, and the director of the state’s Mineral Resources Department predicts that 2,000 new wells (there are now 166 active ones) will be drilled in 2011. Half will be located in a 70-mile radius around Williston, which had to add 1,200 new housing units this year to keep up with demand.

But the state is also looking to the future.

In November, 63 percent of North Dakota voters wisely approved a measure that funnels 30 percent of all oil tax revenues, now at $613 million annually, into a Legacy Fund which cannot be touched until July 1, 2017, at which time it is expected to be about $2 billion and generate $60 million in interest annually for the state’s general fund.

But only interest earned by the fund can be spent by the state

Regrettably, many other domestic shale oil fields have been declared off limits for development in response to greenie pressures. This is a huge mistake, as dependence on energy imports not only weakens our economy, it makes us strategically vulnerable to Arab oil producers who seek a global caliphate.

North Dakota has had a tough century. The state was originally developed as a result of railway construction (The Northern Pacific and Great Northern Railways, building on their way to the Pacific Coast), and was settled primarily by German and Scandinavian farmers, recruited by the railroads to settle the land and generate traffic in the form of wheat. It so happened that the period of railroad construction in the late 19th century was also a period of unusually abundant rainfall. When the weather returned to normal, more arid, conditions, many farmers went bust. The Depression, with low farm prices, was especially hard on the state, too. The population went into decline for decades.

Throughout these tough years, and facing a climate that in winter is more formidable than even that of my native Minnesota, North Dakotans evolved a culture that prized self-reliance and community concern. When people think of heartland values, there can be no greater example than North Dakota, where people know they will perish if they do not take care of themselves and look after their neighbors, just in case.

With its tiny population, substantial growth in North Dakota will not have a major national impact — unless that is, we open up rich federally-constrained lands in other states for similar development.

North Dakotans are accustomed to indifference at best, mockery at worst. South Dakota, with its scenic Black Hills and Badlands, attracted much more attention and growth. Neighboring Minnesota, with its vibrant Twin Cities economy, attracted many young North Dakotans seeking their fortunes. Those left behind faced a bleak future until Bakken. Now, North Dakota is having the problems attendant on prosperity — housing shortages in Williston and Bismarck. As far as I am concerned, prosperity couldn’t happen to a nicer place.