Windfall Profits Taxes
When gas prices rise, members of Congress often call for a "windfall profits" tax on U.S. oil companies, with the aim of redistributing profits from "greedy" oil companies. The last time this country experimented with such a tax was the Crude Oil Windfall Profit Tax Act of 1980. According to a 1990 Congressional Research Service study, the tax depressed the domestic oil industry, increased foreign imports and raised only a tiny fraction of the revenue forecasted. It stunted domestic production of oil by 3% to 6% and created a surge in foreign imports, from 8% to 16%.
The nation's energy companies are already providing a "windfall" of taxes. According to Department of Energy data, from 1977 to 2004, federal and state governments extracted $397 billion by taxing the profits of the largest oil companies and an additional $1.1 trillion in taxes at the pump. In fact, oil companies have paid in taxes more than three times what they earned in profits during those 28 years.
Additional questions about windfall profits taxes? Contact us at (202) 464-6200.
Related Blog Entries
- More Questions About the Obama Tax Plan, by Josh Barro, August 14, 2008
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- Senate Rejects Oil Company Windfall Profits Tax Bill, by Joseph Henchman, June 11, 2008
- Doomed to Repeat History, by Scott A. Hodge, June 10, 2008
- Congressman Proposes that Government Establish a "Reasonable Profits Board", by Gerald Prante, May 4, 2008
- Let Me Get This Straight..., by Gerald Prante, May 1, 2008
- The Worst of the Gas Tax Debate, by Gerald Prante, May 1, 2008
- Is a Windfall Profits Tax Justified by Ability to Pay?, by Gerald Prante, April 30, 2008
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- Tax Gouging at the Pump, by Scott A. Hodge, April 2, 2008
- Obama Goes Populist, Seeks Penalty on Windfall Profits of Oil Companies, by Gerald Prante, March 31, 2008
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- Wisconsin Governor Gives Special Handout to Company Via Tax Code, by Gerald Prante, September 26, 2007
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- Oil Companies Getting A "Free Ride"?, by Brian Phillips, January 17, 2007
- Falling Oil Prices Deflate Case for Windfall Profits Tax, by Andrew Chamberlain, September 15, 2006
- Alaska Enacts New Tax on 'Windfall' Oil Profits, by Andrew Chamberlain, May 23, 2006
- Bizarre Economics of a Windfall Profits Tax, by Andrew Chamberlain, April 29, 2006
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- Windfall Taxes Hit Retirees Hard, by Gerald Prante, November 16, 2005
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- Windfall Profits Taxes A Good Revenue Source?, by Andrew Chamberlain, November 9, 2005
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