Periodically I like to cruise sites like GovTrack, OpenCongress, and the Library of Congress THOMAS looking for interesting pieces of legislation. I found a true gem with HR 3784, the Gas Price Spike Act of 2012. What does this bill do? It places a tax on any profits made by oil companies that are beyond “reasonable.” That isn’t the best part though, what defines “reasonable” is whatever the newly established Reasonable Profits Board decides:
`(a) In General- In addition to any other tax imposed under this title, there is hereby imposed an excise tax on the sale in the United States of any crude oil, natural gas, or other taxable product a tax equal to the applicable percentage of the windfall profit on such sale.
`(b) Definitions- For purposes of this section–
`(1) TAXABLE PRODUCT- The term `taxable product’ means any fuel which is a product of crude oil or natural gas.
`(2) WINDFALL PROFIT- The term `windfall profit’ means, with respect to any sale, so much of the profit on such sale as exceeds a reasonable profit.
`(3) APPLICABLE PERCENTAGE- The term `applicable percentage’ means–
`(A) 50 percent to the extent that the profit on the sale exceeds 100 percent of the reasonable profit on the sale but does not exceed 102 percent of the reasonable profit on the sale,
`(B) 75 percent to the extent that the profit on the sale exceeds 102 percent of the reasonable profit on the sale but does not exceed 105 percent of the reasonable profit on the sale, and
`(C) 100 percent to the extent that the profit on the sale exceeds 105 percent of the reasonable profit on the sale.
`(4) REASONABLE PROFIT- The term `reasonable profit’ means the amount determined by the Reasonable Profits Board to be a reasonable profit on the sale.
Emphasis mine. Whatever this Reasonable Profits Board decides becomes the amount that is taxable meaning if they decided profits of $1,000 was “unreasonable” they could begin taxing oil companies that made profits exceeding $1,000. Glorious huh? They get to define any amount of profit as “reasonable” and tax accordingly. If this bill passes I would expect it to take no more than one year before this idea gets applied to other industries.