I have always been weary of a “windfall profits tax” on oil companies, thinking it sounded kind of mean-spirited and shirking our duty of developing alternatives to gasoline (see, that’s the real way to piss off oil companies: don’t buy gasoline). But, this actually sounds fairly reasonable:
Senate debates windfall profits tax on oil – OregonLive.com
The Senate proposal would impose a 25 percent tax on profits over what would be determined “reasonable” and would allow oil companies to avoid paying the tax if they invest the money in alternative energy projects or refinery expansion.
The tax breaks that would be rescinded, given by Congress over the past five years, are expected to save the five largest oil companies about $17 billion over the next 10 years. The Democratic proposal would funnel the money into tax incentives for renewable energy sources such as wind and solar, and to promote energy efficiency and conservation.
I can see why, during an energy crisis, we’d want to mandate that companies spend most of what they make and ensure they’re not merely hoarding their wealth for a rainy day, the same way we require charities to spend at least five percent of their endowments each year (and how we should require the same of universities). We’re not against profits, we just want to ensure the money we’re sending these companies is spent well. Since the government is my only element of bargaining power in these things, I don’t mind having ’em step into the ring for me.
Meanwhile, here’s a familiar refrain:
Most Senate Republicans have a different approach to dealing with the growing energy crisis — pump more oil and gas.
And they say liberals are naïve!
I’ve always disliked this argument:
Oil executives, testifying before Congress last month, called the proposed taxes “punitive” and warned that they would discourage domestic oil and gas exploration and production, possibly causing prices to rise instead of fall.
And, of course, oil executives are powerless in regard to their firm’s excavation decisions. I don’t like it when companies testify before Congress and say, “you can’t do that, it would discourage us from doing this!” That’s what we call a veiled threat, and we might want to call their bluff one of these days.
I just realized the problem here… the argument the oil companies are making is not just disingenuous, it’s nonsense. More next time.