Windfall Profits Tax

At the Heritage Foundry, Conn Carroll makes a great point...

Ranking all industries by profit margin, oil and gas production is 60th. That means there are 59 other industries that are more profitable than the oil industry.

Exxon Mobil already pays more taxes than the bottom 50% of taxpayers and the company invested a record $25 billion in capital and exploration spending this year.

Read the whole thing for more responses to Nancy Pelosi's questions for Republicans.  Meanwhile, this letter by Don Boudreaux is also instructive...

Barack Obama wants to help consumers cope with high gasoline prices by giving consumers a $1,000 "emergency rebate"; he proposes to pay for this rebate by taxing oil-producers' "windfall profits" ...

Sen. Obama should learn arithmetic. Total profits of U.S. oil companies in 2007 were about $90 billion. If Uncle Sam took all of these profits and distributed them equally to all households in the U.S., each household would get $750. Note that this is ALL profit, not just that portion that Sen. Obama divines to be "windfall."

So suppose that the Senator determines (rather aggressively) that half of these profits are "windfall." That would mean that each household gets a mere $375. Even if Sen. Obama's plan excludes all households in the top half of the income distribution from receiving his "emergency rebate," his "windfall profits" tax would generate only enough funds to give each of the remaining households $750.

If you're in those other 59 higher-margin industries, get ready to chip in.  Meanwhile, as Mike Turk wrote on Twitter today, it's funny how the politicians are happy to suggest a "windfall profit tax" on corporations who make billions, but those politicians rarely suggest a "windfall revenue refunds" to taxpayers from a government making trillions.