OBAMA'S LATEST SOLUTION TO HIGH GAS PRICES: WINDFALL PROFITS TAX
Today, Obama Proposed Imposing A Windfall Profits Tax As A Solution To High Gas Prices:
Obama: "That is why I am proposing that we pay for this rebate by taxing the windfall profits of oil companies so we can use some of their record profits to help families pay record prices." (Mark Halperin, "Senator Barack Obama Announces Emergency Economic Plan," Time's "The Page" Blog, thepage.time.com, 8/1/08)
But History Has Shown That A Windfall Profits Tax Is Bad Policy: It Reduces Domestic Oil Production, Increases U.S. Dependence On Foreign Oil, And Harms Consumers With Increased Energy Costs:
The Non-Partisan Congressional Research Service Found That The Windfall Profits Tax Reduced Domestic Oil Production And Increased Our Dependence On Foreign Oil By As Much As 13 Percent. "From 1980 to 1988, the WPT may have reduced domestic oil production anywhere from 1.2% to 8.0% (320 to 1,269 million barrels). Dependence on imported oil grew from between 3% and 13%." (Salvatore Lazzari, "The Crude Oil Windfall Profit Tax Of The 1980s: Implications For Current Energy Policy," Congressional Research Service, 3/9/06)
- The Windfall Profits Tax Was "An Extremely Complicated Tax To Comply With And To Administer." "The oil industry maintained all along that the WPT was an extremely complicated tax to comply with and to administer. The IRS and the General Accounting Office (GAO, now the Government Accountability Office) both agreed with the industry's claim, and the eight-year experience with the tax also tended to support this." (Salvatore Lazzari, "The Crude Oil Windfall Profit Tax Of The 1980s: Implications For Current Energy Policy," Congressional Research Service, 3/9/06)
The Wall Street Journal: The Windfall Profits Tax Reduced Domestic Oil Production, Increased U.S. Dependence On Foreign Oil, And Increased Prices At The Pump. "The last time Congress imposed a form of the windfall tax was the final gloomy days of Jimmy Carter, and the result was: a substantial reduction in domestic oil production (about 5%), thus raising the price of gas at the pump; and a 10% increase in U.S. reliance on foreign oil. A windfall profits tax is the ultimate act of economic masochism because it taxes only domestic production, while imports and foreign oil subsidiaries bear almost none of the cost." ( Editorial, "Windfall Accounting Tax," The Wall Street Journal, 11/30/05)
Obama Now Wants To Tax The Oil Companies He Voted To Give Billions In Tax Breaks And Subsidies:
The 2005 Energy Bill Included $2.8 Billion In Subsidies For Oil And Natural Gas Production. "The conference agreement provides for $14.6 billion in tax breaks and credits between 2005 and 2015, including: -- $2.8 billion for fossil fuel production..." (Toni Johnson, "CQ Bill Analysis: HR 6," Congressional Quarterly's "CQ Bill Analysis," www.cq.com, Accessed 7/14/08)
Obama Voted For The 2005 Energy Bill. (H.R. 6, CQ Vote #213: Adopted 74-26: R 49-6; D 25-19; I 0-1, 7/29/05, Obama Voted Yea)
John McCain Criticized The 2005 Energy Bill's "Handouts To Big Business And Oil Companies," Calling Them Irresponsible. McCain: "This bill does little to address the immediate energy crisis we face in this country. The handouts to big business and oil companies are irresponsible and will be disastrous for people of Arizona. I cannot in good conscience, vote to pass legislation that does not adequately address issues related to energy efficiency, security, and energy independence." (Sen. John McCain, "McCain, Kyl Say No To Flawed Energy Bill," Press Release, 6/28/05)
- McCain Voted Against The 2005 Energy Bill. (H.R. 6, CQ Vote #213: Adopted 74-26: R 49-6; D 25-19; I 0-1, 7/29/05, McCain Voted Nay)
