Windfall Profits Tax
It will save us money at the pump.
No, really. Ask Bob Casey.
In response to the new round of oil profits, Sen. Bob Casey, D-Pa., introduced legislation Thursday that he hopes will curtail rising gas prices. Casey’s bill would impose a windfall profits tax and close certain tax loopholes for big oil companies and use the money for research into biofuels and other related projects.
Follow the logic here.
1) Oil companies make excessive profits.
2) Levy a windfall profits tax (level to be determined)
3) Oil companies say, “you know, you’re right, we’re going to lower our prices to avoid the tax.”
Be careful not to laugh too hard.
In the real world, step three would be.
3) Oil companies say, “damn, profits are eroding, let’s make that up by raising prices” (thereby passing the tax on to the consumer)
The “real” step three never crossed Bob Casey’s mind? Governor Ed Rendell had the guts to lie to us and say he’ll prevent the oil companies from passing on the tax… perhaps Casey thinks we won’t notice?