Tuesday, June 10, 2008


The Windfall Profits Tax On Oil Companies


I'm having trouble believing it, but I actually agree with something Dick Durbin said:
Senators were to vote Tuesday on whether to consider a windfall profits tax against the five largest U.S. oil companies and rescind $17 billion in tax breaks the companies expect to enjoy over the next decade.

"The oil companies need to know that there is a limit on how much profit they can take in this economy," said Sen. Richard Durbin of Illinois, the Senate's No. 2 Democrat, warning that if energy prices are not reined in "we're going to find ourselves in a deep recession."
But I don't agree with Durbin that the government should determine what constitutes "reasonable" profits. That's for the market alone to decide.

UPDATE (Bump and link fix)

Senator Christopher Dodd agrees with Durbin:
Co-host Joe Kernan called the Connecticut senator on the idea, asking if he was going to apply the same strategy to other types of businesses. “Are you going to go across industries across the board and decide what Congress thinks is a fair amount of profit and drawing a lines on what’s fair and what’s not for corporations?” Kernan then emphasized the point. “That’s not the way it’s done in this country, senator. It could never be done that way, could it?”

“Yes, it could be,” Dodd said.“In fact it’s been done that way in the past and particularly when you’re trying to get some relief for people out here when the economy is in a tailspin. We’re about to go into a recession here. This is really causing a tremendous dislocation, not only here, but around the world.”
Dodd supports the idea many Democrats have been pushing that a windfall profits tax be used to develop alternatives or rebated to consumers. What entitles them to do this?

Dodd, like all Democrats, betrays a spectacular ignorance of business. By answering Kernan's question affirmatively, he is implicitly saying that all of society's resources are ultimately under government control. That is socialism defined and I wish the interviewers had pressed him on it. (Maybe they did?)

Dodd is also openly contemptuous of investors, who according to Dodd should take into consideration congressional schemes to confiscate their profits when making investments decisions. Unbelievable.

(Via The Corner.)

More: Powerline's John Hinderaker proposes a windfall profits tax on authors.


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