On the Nov. 16 American Morning, CNN business reporter Andy Serwer
worried that Congress might not have the fortitude to go ahead
with final passage of a new windfall profits tax on oil companies.
The $5 billion tax measure passed the Senate Finance Committee
yesterday and the House of Representatives is also considering
similar legislation.
Said Serwer: I think the political wrangling that's
taking place right now shows that the Senate might have the
fortitude to do this, because even Republicans seem to be up to the
task. The question is, will it happen at the end of the day? And
it's not at all clear that it will.
Serwer is only the latest example of a mainstream
reporter pushing a windfall profits tax. Earlier this month
Business & Media Institute (BMI)
detailed numerous examples of reporters pushing for a windfall
profits tax as a fair response to record profits by the oil
industry. But BMI noted that reporters never gave context to the
story: many other industries have profit margins similar to the
petroleum industry, and government for the past 22 years has raked
in substantially more tax revenue than the companies have in profit
(see chart).
After Serwer relayed his worries about the political
fortunes of the windfall tax, co-host Miles OBrien poked a hole in
the windfall tax balloon, asking, where's that money going to go?
Not back in our wallets, right? We're still going to end up paying
the same amount at the pump, right?
Conceding that was probably true, Serwer added that
oil companies would say its going to reduce the amount of money
they have to explore for oil, but cautioned dismissively, that is
their perspective.
But its not an opinion, its a time-tested economic
reality. The Business & Media Institute reported a few weeks ago that a
windfall tax from the 1980s was conclusively proven in a
Congressional Research Service report to have decreased domestic
oil production and increased reliance on foreign sources the
opposite of widely accepted goals for U.S. energy policy.
CNNs Serwer Hopes Senate Has Fortitude to Pass Oil Tax
November 16th, 2005 2:00 PM
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