Labratories of Democracy

It has been said that states are "Laboratories of Democracy", places were ideas can be tested. If the idea is worthy, other states can copy it or it can be implemented nationally. On the other hand, if the idea is a loser, at least only a relatively few people are harmed.

Well this idea comes from the state of Wisconsin. Put this in the "free lunch" category. It seems the Governor of Wisconsin wants to tax oil companies but not have any of the tax passed on to consumers. Specifically,

The tax would be 2.5% - or currently $1.50 - per barrel of oil meant for sale in Wisconsin.

Usually, a tax of this magnitude would raise gasoline prices 3-4 cents per gallon. Should those nasty oil companies try to raise prices then,

If oil companies passed the tax on to consumers, the firms could be fined for the gains from the price increase or company officials could face the jail time.

My Mother used to say if you are going to criticize something offer at least one suggestion for improvement. So here goes. If the Governor of Wisconsin wants to raise money from oil companies without those companies passing on part of the tax to consumers he should propose a law that says for this time and this time only we will tax you say 10 cents a gallon for every gallon of gasoline you sold last year. Now I won't guarantee that prices will not rise, but it would not be profit maximizing if they do, assuming firms are maximizing profits now. (It is a fixed cost, unrelated to current output.) Of course, when people do this they get sent to prison for robbing convenience stores.