“Windfall Profit” Tax
Both Matthew Yglesias and John Cole agree that the Obama/Clinton proposal to tax the “windfall profits” of the oil companies is a bad idea, and you’ll get no argument from me. However, one thing that I did notice when I was doing a little google-fu on the issue is that there appears to be approximately 20 to 50 billion dollars spent by the federal government per year on direct subsidies (as opposed to tax breaks) given to the oil industry each year. Unfortunately I can’t pin down the exact number any better than that–it appears to vary every year and spread out amongst different agencies. Still, the GAO should be able to track the exact numbers down, so instead of an extra tax on oil companies, why not just eliminate their direct subsidies? Not only would that generate more revenue than the “windfall tax” (estimated to be $15 billion), but it would do so without getting the federal government into the problematic business of deciding how profitable companies are allowed to be.