Windfall Profits Tax: And It Doesn’t Work, Either
Monday, August 4, 2008Anent the post immediately below: Return with us now to the Jimmy Carter years, 1980, the last time the oil companies were hit with a windfall profits tax. The Tax Foundation reports:
[The] windfall profits tax was forecasted to raise more than $320 billion between 1980 and 1989. However, according to the CRS, the government collected only $80 billion in gross tax revenue ($146 billion in 2004 dollars). The net amount was actually less than this—roughly $40 billion—because the tax was deductible against corporate income.
decreasing domestic production by 3 percent to 6 percent, thereby increasing American dependence on foreign oil sources by 8 percent to 16 percent. A side effect was declining, not increasing, tax collections.
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