Document:California Press Release 31 March 2000 Oil Company Excess Profits Tax is Government Extortion

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400 Capitol Mall, Suite 900
Sacramento, CA 95814
For immediate release: March 31, 2000
For additional information:
Juan Ros, Executive Director
Phone: (818) 782-8400

Libertarians: oil company excess profits tax is 'government extortion'

SACRAMENTO -- A plan to tax oil companies' "excess profits" is tantamount to extortion, would do nothing to lower gas prices, and sets a dangerous precedent for future industries that fall out of political favor, the Libertarian Party of California announced today.

The plan was proposed this week by Attorney General Bill Lockyer and received the support of many Assembly Democrats, including Speaker-elect Bob Hertzberg (D-Sherman Oaks). Lockyer wants the state government to seize any oil company profits in excess of 40 cents per gallon.

"This is extortion by government, nothing else," said Libertarian state executive director Juan Ros.

"In their misguided eagerness to 'do something,' the Attorney General and Assembly Democrats are supporting an undemocratic, arrogant, and shameless plan that will only make matters worse. We urge these tax barons to end their excessive meddling now."

Lockyer's plan is one of several proposals being considered by the California Legislature in the face of gas prices that are the highest in the country.

Libertarians oppose any attempt to influence the market. "Gas prices are already starting to decrease on their own, and OPEC's decision this week to increase production will have a positive effect on gas prices," Ros pointed out.

"But if the Legislature passes any of these reckless proposals, motorists are going to continue to suffer."

Lockyer's excess profits tax idea is especially dangerous, according to Libertarians, because of the precedent it would set.

"Any politically unpopular industry can become a government target," Ros noted. "The tobacco and gun industries have already seen the damage government can do. Why stop at Chevron and Arco? What's next? Why not tax the 'excess' profits of McDonald's, or Disney, or Amgen?"

Politicians will get to decide what is considered an "excess" profit, Ros added -- another reason to oppose such a plan.

"In a free society, government should not decide how much money companies can make. Mr. Lockyer obviously doesn't understand this."

So what should Sacramento do to help motorists?

"Lawmakers should repeal the state's excise and sales taxes on gas. Barring that, they should do nothing," Ros suggested.

"If they want to return excess profits to Californians, they should give back the state's $8 billion 'excess profit' -- the surplus."