There are certain laws you can break without serious repercussions, but the laws of economics are far less forgiving. And history shows that Americans will all pay a hefty fine if lawmakers choose to enact a “windfall” profits tax as House Speaker Nancy Pelosi has just proposed and Democrat presidential candidate Barack Obama supports, says Margo Thorning, chief economist at the American Council for Capital Formation.
Reinstituting the windfall profits tax on oil companies will only reduce the amount of money companies can plow back into finding more oil and reduce the return to shareholders. A more serious and useful approach for bringing down high energy prices would consist of several steps:
In the long run, explains Thorning, these steps would gradually enhance energy supplies, reduce demand for energy, and relieve the global pressure on energy prices.
That’s a real plan for reducing American’s high energy cost frustrations, says Thorning.
Source: Margo Thorning, It’s Unwise To Tax ‘Well-Earned’ Profits, Investor’s Business Daily, August 26, 2008.
For text: http://www.ibdeditorials.com/IBDArticles.aspx?id=304558228573095
For more on Taxes: http://www.ncpa.org/sub/dpd/index.php?Article_Category=20
FMF Policy Bulletin/ 02 September 2008
