…To make this happen, he has called for a special session of the California Legislature. He's calling it a "price-gouging penalty." That will make it an easier sell to those averse to tax increases. And a "penalty" could get around the constitutional requirement for a two-thirds vote in the Legislature to increase taxes, although such an action inevitably would end up in the courts. If oil prices go too high, as determined by the Legislature, the penalty would be imposed and be put into a "Price Gouging Penalty Fund," which somehow would be given to motorists, much like the inflation rebates currently being sent to Californians. "For me this is about never seeing those spikes again," the governor announced Monday, addressing the sharp prices rises of last summer that saw gas rise in some areas above $7 a gallon. "You guys are all being screwed and taken advantage of." This windfall tax proposal — or "price-gouging penalty" — makes no sense upon even the most minimal of review. Newsom himself is a business owner and has to understand why… www.msn.com/en-us/money/markets/editorial-newsoms-tax-proposal-flunks-economics-101/ar-AA1541DN This editorial board is exactly right. Price is controlled by supply and demand. Government attempts to interfere often adversely affect things. These kind of taxes are almost always passed onto the consumer.
A real solution is to produce more supply rather than restrict it and stupidly assume prices would not rise. But it is the progressive left we’re talking about here.
The law assumes the governor and state legislature know a lot about gasoline production, distribution, and marketing, which they do not.
In the annals of oil and gas history you don't think the major players haven't ever manipulated this demand When an opportunity arises that they can blame it on something like the pandemic? This is what windfall profit taxes are about To give back to the marketplace that which they have stolen due to opportunism Tell us you are not that naive, please say it isn't so Moreover, if you knew something about economics you would know that prices are due to demand and not costs. Where the thing becomes unjust is where the major players manipulate demand and prices when the opportunity gives them cover. Where there are few operators and a large market they can do this --they have a power to do it and no doubt they do do it. It's illegal but proving it is very difficult so the solution is a windfall profits tax
Prices are set by demand and supply which in large part equals cost. Can you tell us how an oil company can in any way manipulate demand for gasoline????
Funny he didn't mention the gas tax on top of an existing gas tax on top of increased registration fees that fund the new roads most Californians can't afford to drive on.
If it happens he could drive the oil industry out of California, leaving everyone with the need to buy an electric car and build windmills to generate electricity. California is a beautiful place with a very ugly government and, strangely, the majority of Californians like it.
Like all of these wacky California experiments, I say go for it. I'll laugh and laugh when oil companies pull out of doing business in California. That's the goal isn't it?
