Redstate

By Vladimir Posted in 2007 | Bobby Jindal | Louisiana — Comments (1) / Email this page » / Leave a comment »

Democrat Foster Campbell is running for Governor (primary Oct. 20) on one idea and one idea only: replace the state's income tax and half the oil and gas production tax with a new $5.5 billion tax on oil and gas processed within the state. That way, Louisiana's grasp would extend for the first time to the Federal zone of jurisdiction in the offshore, the source of 25% of the oil and 20% of the natural gas consumed in the U.S.

Campbell's TV ad campaign would have the viewer believe that the burden of the tax would fall on Saudi Arabia and Venezuela. In fact, foreign oil can and would be imported to ports and refineries in other states. The parties that would be hurt would be the producers in the Gulf of Mexico (increasingly, independent firms, not the "majors"), local refiners, and consumers from coast to coast.

more...

Larry Wall, spokesman for the Louisiana Mid-Continent Oil and Gas Association, said no industry could survive a $5.5 billion tax. And a tax on energy would place a burden on all businesses, he said.

The tax would impede interstate commerce and probably violate the U.S. Constitution, Wall said. The industry, which employs 20,000 workers in Louisiana, would over time move assets out of state, eroding Campbell's proposed tax base.

Campbell said other states do not want refineries, so the plants in Louisiana will have to stay. To those that pare down, good riddance, he said.

"It's not like they're the best thing that's ever been invented," Campbell said. "It's a polluting deal. They use our air, they use our water, they've torn our coast up. And what are we supposed to say? 'Well, thank you for the refineries?'"
[emphasis added]

How 'bout "Thanks for the jobs!"? Those refinery and chemical jobs can pay $100,000 per year (for hourly workers); the jobs and the industrial output are the benefits the state enjoys because of its geographic proximity to the offshore production.

This tax proposal is a throwback to the misguided populism that should have died with Huey Long in the 1930's. A conservative principle is that corporations don't pay taxes, people pay taxes.

Now, I don't think for a minute that this tax has a prayer of being implemented. For the time being, U.S. Rep. Bobby Jindal (R) would appear to be the odds-on favorite to take the seat as Governor early next year. Campbell polls in the single digits. Any tax vaguely resembling this one would be tied up in the courts for years - it is clearly intended to be either a state levy of an import duty, or a duty on interstate commerece (perhaps both).

No, the main reason to discuss this misguided idea is to underscore the fact that, once again, the Democrat Party is the Party of Bankrupt and Economically Unsound Ideas.