The proto-communists that seem to run the show whenever the economy hits a speedbump have been talking up a “windfall profits” tax for BigOil. I suppose this is a punishment for the oil companies… a victory for the proletariat over the evil empire.
Of course, this isn’t a new idea at all.
The country has had a previous bad experience with “windfall profits taxes” on oil companies. In 1980, as a parting gift, President Jimmy Carter and Congressional Democrats imposed just such a tax.
The Congressional Research Service had “…found the windfall profits tax had the effect of decreasing domestic production by 3 percent to 6 percent, thereby increasing American dependence on foreign oil sources by 8 percent to 16 percent. A side effect was declining, not increasing, tax collections.”
While I am certainly not as concerned about “energy independence” as it seems that everyone else in America is, it certainly is not within America’s best interest to artificially increase our dependence upon oil imports.
Further, the revenues drained by these taxes handcuff the domestic oil industry’s ability to invest in exploration and development of new sources of oil (or potentially alternative energy sources).
