Things which peeve me Thursday – Windfall profits tax

A couple of days ago, Democrats in the Senate attempted and failed to enact a windfall profits tax on oil companies as a response to high oil prices. This tactic was tried during the Carter Administration and it did not work then; it will not work now. At best, this is “share the misery” legislation; at worse, the oil companies will simply pass the cost on to us, the consumer.

Economics says if you want more of something, subsidize it; if you want less of something, tax it. Many years have passed since my economics classes in college but I do not think this has changed. Can someone please remind me how placing an additional tax on oil producers might make them produce more oil or charge less for the oil they sell?

I didn’t think so…

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