A Windfall tax on the oil companies is the worst thing you could do. Oil companies already pay a higher tax rate than other companies at 47%. The last time we imposed a windfall tax (president Carter) oil production dropped 6% and imports rose 16% making the US more dependent on foreign oil. In fact the price of fuel for the public rose instead of dropping.
Why would an oil company invest in expansion to increase production or risk research, exploration and development of new technology if the government rewards you with a windfall tax? Are you going to allow windfall loses when the oil companies don’t make a profit?
One thing people don’t realize is that oil companies profits we are hearing about are from doing business worldwide and only 30% of their profits is contributed to US sales. Another thing people don’t realize is the price of oil is controlled by the commodities market and not regulated by the oil companies. All this talk by the politicians is just a smear for votes.
Some tax facts here with charts showing the effects.
Current Events » in reply to windfall profits
windfall tax is bad
The whole thread (32 posts)
- Why we need more economics education