FROM IBD
HEAD: DEMOCRATS' WINDFALL TAX -- ON YOU
In their ongoing war against U.S. oil producers, Senate Democrats say
they'll slap Big Oil with a windfall profits tax and take away $17 billion
in tax breaks, among other punishments. The planned 25 percent tax on
windfall profits would be imposed on oil company earnings above what the
Senate's wise members decided was "reasonable." Never mind that what's
"reasonable" to one person might be punitive to another, says Investor's
Business Daily (IBD).
The last time the United States had a windfall profits tax on oil
companies,
the results were [disastrous]:
--Over the entire 1980-1986 period, the (windfall profits tax) reduced
domestic oil production from between 320 million barrels . . . and 1,268
million barrels according to the Congressional Research Service.
--Oil companies were hit hard by the tax, and in line with basic economic
theory, they produced less oil, not more.
--The effect of reducing domestic oil production was to increase the level
of im****ted oil, says IBD:
At the time, the United States im****ted about 30 percent of its oil;
today,
we im****t about 60 percent.
In part, that jump in oil dependency was due to the huge tax advantage we
gave foreign oil companies in the 1980s -- and to the continuing advantage
we give them today by refusing to let our oil companies produce more crude
from our own reserves.
Revenues from the windfall tax were far less than expected, because
producers pumped less and non-taxed im****ts flooded our market. Compared
with a forecast of $393 billion in windfall tax revenues from 1980 to
1988,
Congress got a mere $80 billion.
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Dose dim Dems..."stupid is as stupid does" indeed.
Dionysus
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