"Reasonable Profits Board". You just can't make this up.

From thehill.com (I found the link on hotair.com, credit there):

"Six House Democrats, led by Rep. Dennis Kucinich (D-Ohio), want to set up a "Reasonable Profits Board" to control gas profits."

Let that sink in for a moment. Really massage it into the lining of your frontal lobe. They wish to create a board who's express purpose is to control the profits of a private entity.

Seriously? Do I even need to write a blog about why this is a bad idea?

Naturally, I'll write one anyway, but let the record show it shouldn't be necessary.

The bill, HR3784 AKA the "Gas Price Spike Act", can be found in its entirety here. Its stated purpose is to "impose a windfall profit tax" on oil and natural gas. It will use this money to fund a tax credit for purchasing new fuel-efficient vehicles, and to bring down fares on mass transit.

Don't worry, though, no cause for alarm. The percentage of profits above a certain level to be taken is only a meager 50-100% . That's all, just all of them. No biggie.

Basically, any profits from 100-102% above the reasonable level gets stolen taxed at 50%, 103-105% at 75%, and 105%+ at 100%.

Now you may have had the same question I did: What exactly is a reasonable level for profit? See, I've labored under this crazy delusion that the reasonable level for profit was equal to the most you money you could possibly conceive. So, if you manage to run a successful business that follows all applicable laws and have a profit margin of one bajillion percent, then that is reasonable. And also awesome.

Au contraire, says Mr. Kucinich. It is up to the Government to tell us what the reasonable level is. Fortunately, they have a very fair mechanism to do this.

The bill creates a "Reasonable Profits Board" that will consist of three guys appointed by the President. These three guys are brought on for a term of 3 years, and they cannot have any "financial interest" in any of the companies they are to judge.

So these three Robber Barons set a level for "reasonable profit" on oil and natural gas, a level that is completely arbitrary and is tied to exactly nothing but their own whimsical fantasies. Also, since they can have no financial interest in the companies (which at face value seems logical), that practically guarantees that they will have no idea what they are talking about.

The rest of the bill is also silly. It creates a tax credit for buying fuel efficient vehicles (as long as those vehicles are made in the US, and not just by any US worker. Only those fashioned by unionized workers count. No joke, check Sec 25e, sub section (c) paragraph (1)C). This only serves to distort the market, creating artificial demand for a product that consumers don't really want. The same logic applies to the reduction in mass transit fares.

But forget all that. How about we examine the premise, that oil and gas profits are completely out of whack with reality? Let's check the board. Show me exorbitant oil and gas profits! Survey says!?

False.

In fact, oil and gas run at a healthy, but not outlandish, 10.2% margin. That puts them below financial data (11.6%) and railroads (12.6%), and it is completely dwarfed by internet retailing (19.4%) and network communications (20.4%). Where is the rallying cry to confiscate the profits of eBay?

But let's forget that too. Let's say for the sake of argument that the oil and gas companies made a profit of 1000%. What does that have to do with anything?

This Board would be given the authority to punish law-abiding companies. Companies which have done absolutely nothing illegal. Companies whose only "crime" is being too gosh darned successful! How DARE they provide a product that satisfies a demand of the private sector!? Those heartless bastards.

The message the government would be sending is "Invest your money but don't make too much now! We want you to be successful, but if you get too successful then by god we will crush your profits with a force like the mighty hammer of Thor!"

I could go on for days, but my brain might explode.