Windfall Tax, Anyone?
The Free Market Project has noticed of late how the media are warming back up to the notion of a "windfall profits" tax on oil companies. The windfall profits tax was a hotter topic in the months after Katrina, but the idea didn't stick then. But now with a new session of Congress, a State of the Union address on the way, and 2005 profit reports running over the wires, the push to soak "Big Oil" is on again. [see more below the fold]
But putting aside the fact that the tax would be a disaster -- disincentivizing investment and oil exploration -- oil giants like Exxon in their best years earn only about a 10 percent profit margin, while publicly-traded companies which run newspapers typically earn double that amount.
You can find our latest work on the media' push for yet another tax at the links below: