From SFGate: Senate Democrats on Wednesday called for a windfall-profits tax on oil companies...The proposal also would impose federal penalties on energy price gouging and calls for stopping oil deliveries into the government's emergency reserve.
The proposed 25 percent profits tax would apply only to windfall oil company earnings above what would be considered reasonable and only if those profits are not reinvested in refinery capacity expansion or renewable energy sources, according to a summary of the proposal.
Comment: In another case of politicians telling the public what it wants to hear, we now have some liberal democrats pushing for an economic experiment that has been tried in the past and failed—the windfalls profit tax. Of course, these skillful sophists are betting that most of the American public has nary any memory of the 1980’s, the last time these taxes on oil companies were tried and were
shown wanting (1980-1987): Windfall profit taxes brought less domestic production and MORE dependence on foreign supplies of oil. This is not what we need right now or in the future--higher gas prices.
Instead of trying to correct popular economic misconceptions, these guys indulge them for political gain at our expense.