In the “definitions” section (page 2), we get (among other things):
- (2) WINDFALL PROFIT – The term ‘windfall profit’ means, with respect to any sale, so much of the profit on such sale as exceeds a reasonable profit.
- (4) REASONABLE PROFIT – The term ‘reasonable profit’ means the amount determined by the Reasonable Profits Board to be a reasonable profit on the sale.
That’s it! “Reasonable Profit” is anything the Reasonable Profits Board deems it to be! No specifics at all. Any profit made from selling anything made from crude oil or natural gas above what is defined as “reasonable” will be taxed thusly:
- 50% tax on 100% to 102% of profits deemed unreasonable
- 75% tax on 102% to 105% of profits deemed unreasonable
- 100% tax on over 105% of profits deemed unreasonable
Further, the act specifies (on page 7) that mass transit is to receive grants (spelled subsidies) from taxes imposed on unreasonable profits. The Reasonable Profits Board is established on page 8 of the act. The act calls for three members, appointed by the president, to serve for three years.
Besides gasoline, some 6,000 other products are made from crude oil. Is the Reasonable Profits Board going to limit itself to just gasoline sales, or is it going to venture into the profits of these other products?
The bill was introduced on January 18, 2012, by its sponsor, Rep. Dennis Kucinich (D-OH), and its five co-sponsors, all Democrats, John Conyers (MI), Bob Filner (CA), Marcia Fudge (OH), Jim Langevin (RI) and Lynn Woolsey (CA). I guess these six Democrats have never heard of dividends or of reinvestment of capital required to find and produce more crude oil. Please see this source for a very good (IMHO) discussion of the economic impact of the proposed bill.
But that’s just my opinion.