Should There be a "Windfall Tax" on the Excess Profits of Oil
In a Nutshell
- Record prices for gas have been accompanies by record profits for the oil companies, punishing the
little guy instead of billionaires.
- Rich oil executives are making millions in options and bonuses, even if their companies aren't
- Money brought in could be put into an energy trust fund or alternative fuel research; it also could be put
into other areas where we need funds such as defense, education,
social security, etc.
- It ensures there won't be price gouging since unreasonable profits are taken.
- It provides a disincentive to the use of oil as an energy source, which may be a good thing since there are
more environmentally-friendly sources, and you have less chance of problems such as the BP oil spill in 2010.
- Gas prices will likely increase since oil companies will factor the tax into their prices.
- Less potential for large profit means less incentive to invest in exploration, drilling, and refinery development;
thus, it will lead to supply problems and greater foreign oil dependence.
- Companies shouldn't be punished just because they are successful.
- Oil stocks, which are owned by many Americans in 401(k)'s and other critical investment portfolios, would likely
plunge in value.
- Since almost all companies have transportation-related costs or purchase items that have to be transported, the tax
would increase inflation, leading to higher prices on items unrelated to oil.
- Corporate profits of non-oil-related companies would tax a hit; thus, the decrease in corporate tax revenues
would offset the money brought in by oil taxes.
Do You Know What Taxes You're Paying?
Pros and Cons of Taxing the Rich
Should Oil Companies a Windfall Profits Tax?
Wikipedia - Windfall Profits Tax
Congressional Budget Office Testimony on Windfall Tax
Is anything missing? Is any of the material inaccurate?
Please let me know.
Written by: Joe Messerli
Page Last Updated: 01/07/2012