Thursday, October 27, 2005

"Smartest woman in the world" a functional illiterate in economics

At least there is finally a Democrat proposing a solution instead of kvetching about it. Too bad the proposed solution makes as much sense as a "soup sandwich"!

Her Highness Hillary Clinton has been legislatively anemic since getting to the Senate over five years ago. However, such a puny legislative achievement pedigree hasn't stopped the MSM for showering her with favorable coverage like Bill Clinton showered Monica with...ah, never mind, that's too easy!

Well, now Her Highness has decided the best way to help Americans with their high gas prices would be to...increase the amount of money consumers pay for their gas prices. Excerpt from story:
Speaking to a group of alternative energy investors in Washington, D.C., Clinton proposed to sock oil companies with $20 billion in new fees that would be used to fund research on clean energy - driving up costs for oil producers that they would inevitably pass along to consumers.


Mrs. Clinton insisted that her $20 billion fee plan was "not about new energy taxes on consumers" - but she declined to say how oil companies would absorb the additional costs without charging consumers.
Emphasis mine. Notice how liberal politicans are petrified to use the more appropriate (and correct) terminology: taxes.

Does she think that the gas companies will take these new taxes lying down? Is she really that ignorant of economics, or is she just pandering for votes early on? She's probably tailoring her message to the same group of dumbed-down myrmidons who believe that corporations actually pay income taxes! In case you're one of those said myrmidons, here's how it works:

Corporations don't pay income taxes. Their shareholders do, their employees do, and their customers (i.e. you, the general public) do. You can't tax a corporate entity. It's impossible. When a corporation pays taxes, it embeds the cost of the taxes into its products' prices. It puts a limit on how much money can be divvied up amongst their employees and shareholders. In short, it's a tax on everyone with the most remote connection to that business. Corporations don't pay taxes...they collect them.

So, if Her Highness wants to tax Conoco, Chevron, etc., then those companies will say "Fine. We're not going to let it affect our bottom line, so we need to increase prices at the pump to offset the new taxes (or, as Shrillary likes to call them, 'fees')!"

"Not about new energy taxes on consumers"? That would be the guaranteed outcome! Therefore, she's either economically stupid, or she's a pandering dishonest politician. So which is it?