Thursday, May 24, 2007

Behind the Push for the Oil Tax

We’re going to connect a few dots and tick off a few people…

If you have been listening to the radio at all, you have probably heard a radio ad from the Road Builders supporting Doyle’s proposal to tax oil companies $370 million.  Here’s some of the verbiage from the ad. 

“The state’s chamber of commerce is running ads and wants you to believe the status quo is good for Wisconsin,” say the new ads by the Wisconsin Transportation Builders Association. “You know better. It’s time for Wisconsin to turn the tables on big oil.”

The Road Builders are trying to sell Doyle’s lie that Wisconsin can somehow force the oil companies to NOT pass on the tax to the consumers of Wisconsin.  Of course, everyone from the Wisconsin Policy Research Institute to Wisconsin Manufacturers and Commerce to UW business professors to the Wisconsin Legislative Council says that’s a bunch of crap and this tax will result in 5 to 7 cent per gallon increase in gas prices.

Also, it’s worth noting that despite this massive tax increase that Doyle wants to put on the backs of Wisconsin’s gas consumers, Assembly Speaker Huebsch has been very soft about opposing it. 

Republican Assembly Speaker Mike Huebsch is not so sure. “It is very likely to go back to consumers.” But Huebsch is so concerned about highway construction and maintenance being delayed statewide because of lack of funding, he does not rule out this oil profits tax to support Wisconsin’s roads. “I haven’t made a position on the oil franchise fee. I think what we need to do is find ways to be more efficient in transportation, but where there is need for more dollars, look at all the options that are out there,” Huebsch said. “This is one of those that’s out there.”

Why?

We know why the Road Builders want more gas taxes.  It funds more transportation spending which is money directly in their pockets.  It’s easy to say that the Republicans and Democrats are in the Road Builder’s pockets.  But who exactly are we talking about here?

The guy behind the Road Builder’s ads advocating the gas tax increase and the guy who is pulling the strings in the Speaker’s office is none other than former Thompson Secretary of Commerce and uber-lobbyist Bill McCoshen. 

This is worth noting because McCoshen also wants to be governor some day.  He put his name into the WisPolitics straw poll at the GOP convention. 

But McCoshen is also linked to Dennis Troha and possible corruption in the Thompson administration:

A decade later, investors partnered with Troha signed a secret agreement promising a $46.5 million payment to a lobbying firm owned by a former top Thompson aide if it could persuade federal regulators and Thompson to approve a casino in Kenosha.

The firm, Madison Consulting, was owned by Bill McCoshen, previously Thompson’s chief of staff and campaign manager, and his lobbying partner.

The deal, initially signed in 1997 and revised in 2000, called for the firm to receive $4.5 million once the project was approved and then $42 million over the next several years for what the report called virtually no work.

The billing records of Stephen Hurley, the Madison lawyer close to Thompson whose firm drafted the revised agreement, show he spoke with Thompson on the phone at least once and his aides several times about the project in 2000.

Thompson has said he was unaware of the deal and that he was never lobbied by McCoshen’s firm on the project. He left to join President Bush’s cabinet in 2001 before the project, which later fell through, reached his desk.

“This is an old story,” McCoshen said Tuesday. “Seven years ago, this issue was put under a microscope by state and federal officials, and they found nothing inappropriate.”

This is the dirty back-end of politics.  McCoshen, a well-connected lobbyist with deep ties in the Wisconsin GOP, is pulling the strings in the leadership of the Republican-led Assembly to get a massive tax increase passed for his own personal gain. 

McCoshen, or “Billy Mac,” is going from running Tommy’s campaign to running Republicans into a tax hike.  He is going from “king maker” to “minority maker.”  Because if the Assembly passes a massive gas tax hike, they are virtually assured to lose the majority next year. 

Maybe this is why Huebsch won’t sign my tax pledge.

(13) Comments
Posted by Owen at 0723 hrs
Politics + Politics - Wisconsin

  1. Thank you for pointing out that it is not always democrats trying to increase taxes.  It is the party of government.

    Posted by .(JavaScript must be enabled to view this email address) on May 24, 2007 at 1205 hrs


  2. POG = Party Of Government ... or PIG = Party In Government.

    Posted by pdigaudio on May 24, 2007 at 1348 hrs


  3. Bravo.  Well stated.  I am no more interested in paying more taxes to build more roads that we can survive without than I am in paying more taxes to maintain cadillac health insurance plans and pension plans for public employees with overly rich benefits.

    The stupid thing about this effort is that the list of people screaming for this massive road construction spending is so small and obviously self-interested.  When’s the last time you heard a gathering of Wisconsinites moaning about the horrible condition of our roads and the need to spend more money on them?

    Posted by .(JavaScript must be enabled to view this email address) on May 24, 2007 at 1553 hrs


  4. No surprise. During the Thompson Administration, one group that never got short-changed was the road-builders. Looks like McCoshen is being rewarded for past service and I’m sure there’s a big bonus waiting if he can pull enough strings on this one. Always good to see an ex public “servant” cashing in on his political clout.

    Posted by .(JavaScript must be enabled to view this email address) on May 24, 2007 at 2209 hrs


  5. I am so pleased to see the WMC spending millions to stand up for the oil companies on this issue. Shame on Jim Doyle for doing what George Bush and the rest of you Republicans are too scared to do, that is to stand up to Big Oil and call them out for the screwing of America.

    No matter HOW many $$ the WMC spends, most of the common folks I talk to support Doyle’s effort to go after Big Oil. Just like what happened last November, they will remember in November 2008.

    Posted by .(JavaScript must be enabled to view this email address) on May 25, 2007 at 0508 hrs


  6. During the Thompson Administration, one group that never got short-changed was the road-builders

    Don’t forget the Association of General Contractors.  If you think there are too many UW campi, and/or too many buildings on those campi, you’re WRONG.

    There are NEVER enough State-contracted buildings.

    Posted by dad29 on May 25, 2007 at 0838 hrs


  7. Remember the money for the road builders would have been there is Diamond Jim hadn’t raided the fund and given it to the teachers.

    Posted by .(JavaScript must be enabled to view this email address) on May 25, 2007 at 1212 hrs


  8. Observer -

    Giving hell to “Big Oil” is just a bumper sticker.  It WILL get passed on to consumers - just as every single other tax on “big business” does. 

    But consider these numbers on a gallon of gas:
    Federal Tax - 18.4 cents
    State of WI Tax - 32.9 cents
    “Big Oil” profit - 10 cents

    So who exactly are we being screwed by?

    Posted by .(JavaScript must be enabled to view this email address) on May 25, 2007 at 1327 hrs


  9. Lets all remember that all the tax money that we pay into the state and federal gov. will be returned to us as citizens. Gov. builds roads, repairs infrastructure, and puts that money to work.  Sure we may not agree with the way they spend it (Iraq War) but they give us services.  All the oil company seems to do is pad their wallets with our dollars.

    Posted by .(JavaScript must be enabled to view this email address) on May 25, 2007 at 1637 hrs


  10. Jason,

    Do oil companies not employ anyone?  Do they not provide returns on investments for pensions and 401ks? 

    Go a week without petroleum and then tell me how evil the oil companies are for providing us with a commodity that we want.

    Posted by Owen on May 25, 2007 at 1650 hrs


  11. Observer and Jason are undoubedly the product of a public school education.

    Posted by .(JavaScript must be enabled to view this email address) on May 26, 2007 at 1511 hrs


  12. Owen,

    The question is not whether the oil companies should make a profit.  Rather, the question is should they be allowed to make “record” (read: excessive) profits.

    Also - to suggest going without petroleum would prove a point, and further that they provide jobs, is again missing the point.  Yes, they provide jobs, but at what cost?  And do the jobs you refer to come with a share of these record profits?

    My stance is that the oil companies should be regulated as a public utility, just like we do for natural gas, water, and electricity.  The time has come for some sanity with gas prices.

    For the record I am a fiscal conservative, and I do not believe in “big” government.

    Posted by .(JavaScript must be enabled to view this email address) on June 01, 2007 at 2316 hrs


  13. Eric,

    Define “excessive” profits to me.  8%?  10%?  20%?

    Because WE Energies - a utility company regulated by the government - runs about a 7% to 12% profit:

    http://phx.corporate-ir.net/phoenix.zhtml?c=114170&p=irol-newsArticle&ID=993324&highlight;=

    Exxon’s last quarter has them at 10.7% net earnings:

    http://energy.seekingalpha.com/article/33627

    The issue with gas prices has nothing to do with excessive profits (whatever that means).  It has everything to do with ballooning petroleum-based economies (China, Eastern Bloc, etc.)  Just wait until Africa experiences an industrial boom.

    Posted by Owen on June 02, 2007 at 0717 hrs


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