Milk to High? Tax and limit the cow!

Global demand for oil drove prices higher today as market insiders predicted an increase in demand from China as a result of earthquake reconstruction projects.

"The catalyst for oil's latest advance was an International Energy Agency report that said global demand will continue to rise, especially in China. Demand for fuel for reconstruction work in the aftermath of May's earthquake will boost Chinese oil demand by 5.5 percent this year, the IEA said, a slightly higher forecast than in previous reports. 'A 5.5 percent increase in one of the largest consumers of oil in the world is a lot of barrels of oil,' said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill."

http://moneynews.newsmax.com/economy/oil_prices/2008/06/10/103219.html

So, while congress wants to tax the domestic oil companies earnings and limit domestic production through restrictions on refinery construction, nuclear power construction, and domestic drilling; the Democrats solution to high gas prices is to tax oil companies earnings. Tax the cow.

If a farmer pays $1 for his grazing land, $1 for feed, and $1 to buy a milk cow; he might sell a gallon of milk for $3.08, making an 8 cent profit. Most people would not accuse him of Milk gouging, but if people complained of the high price of milk, the Democrats' solution would be to tax the Farmer's profit by 1 cent. What would happen?

The farmer (who's costs are fixed) would increase the price of milk by 1 cent, and because of his perception of increase government interference, he would be hesitant to buy a few more cows to spread the cost of his land purchase over two or three animals.

Oil is milk, energy companies are farmers. RECORD PROFITS BY OIL COMPANIES!!! Nice headline to build class warfare and envy upon. However, an oil companies general profit is 8 percent, or 8 cents on the dollar. Because the Democrats have not allowed them to build refineries, nuclear plants, or expand domestic drilling for 30 years, the company can't reduce their set costs of raw materials. The energy companies are stuck producing as much domestic energy as logistically possible, and purchasing re rest of the oil on the market. Who are they competing with in that market ----- CHINA.

So, until energy companies are allowed to develop domestic sources, the price of oil will remain high, and the Democrats solution is to tax them more.

I guess I will drink water, but thats another issue all together.

The A-Hole.