It's Jimmy Carter all over again!

Also aboard the windfall-profits bandwagon are presidential hopefuls Barack Obama and Hillary Clinton. "We've got to go after the oil companies and look at their price-gouging," proclaims Obama. "We've got to go after windfall profits."

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We've been down this road before. Under a windfall tax signed into law by Jimmy Carter, domestic oil production plummeted by an estimated 795 million barrels, while imports of foreign oil surged. Congress had anticipated windfall tax revenues of $393 billion. The actual take: just $80 billion. Like so much else associated with the Carter era, the windfall-profits tax was a counterproductive flop. Do Democrats really believe a new dose of Carternomics is going to make today's economy stronger?

If you want to see a real windfall, take a look at what Big Oil pays in taxes. The 27 largest US energy companies forked over $48 billion in income taxes in 2004, $67 billion in 2005, and more than $90 billion in 2006 - an 87 percent increase. Since 1981, the Tax Foundation calculates, the oil industry has earned a cumulative $1.12 trillion in profits - but it paid a cumulative $1.65 trillion in taxes (add another half-trillion to account for taxes paid to foreign governments).

So let's be clear on this -- the Democrats are out to kill the goose that lays the golden egg, all in the name of getting more gold from the goose. We know what happens when these "solutions" are tried -- because they did it three decades ago, and they failed.

And all because the oil companies make 8.1 cents for every dollar in sales -- a modest rate of profit, by any standard that allows for profit.

Be sure to click on the links in Jeff Jacoby's columns -- they'll show you just how much the oil companies are paying in taxes already.

Posted by: Greg at 07:37 AM | Comments (1) | Add Comment
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