How would a windfall profit tax solve the energy crisis?

Question

With some folks screeming we need to raise taxes on the oild ocmpanies, my question is how will this improve the energy crises. If the goal is to force them to lower prices then won't this just result running out of oil faster, wouldn't it make more since approve refineries and drilling for the short term while using research grants and tax breaks to research alternitive fuels for the long run?

Answer 1

The windfall idea is a VERY BAD because it will carry over to the consumer no matter how Obama tries to lay it out.

Whenever you try to tax the oil companies for their "high profits" remember you are ALSO taking money away from their RESEARCH AND DEVELOPMENT department which looks for other sites to tap for oil.

My best example for this assumption is HARLEY DAVIDSON. They were a stone's throw away from filing from chapter 11 bankruptcy and they're RESOURCE AND DEVELOPMENT department got them out of the jam by making motorcycles that suited American and international tastes a lot better along with making engine sizes below the domestic limit. Hope this helps!

- Jerry, University of South Florida Economics Major

Answer 2

Windfall Profits tax is a joke. It won't solve anything and only moves this country closer and closer to Socialism. Where the Govt dictates everything.  "You made too much money, we'll send the IRS to take it."  --  "You made too little corn, the USDA is coming in to seize your land and grow corn."  --- "Those Intel chips are too powerful for civilian use. The FBI is coming to seize your chip factory."

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We need to keep Government out of Free Market Economics.  If you don't like high gas or rich oil companies, (DONT BUY THEIR PRODUCT).

Answer 3

Windfall profit tax will enable oil producers and refiners to pass on the tax to consumers.  This will not arrest the oligopoly.

The only effective solution is to nationalize oil production and distribution until the American consumer can get a sense of relief from the burdensome expenses of energy and oil.  It sounds drastic.  It has become economically critical.

Nationalize energy for a set period of time.  Issue $10,000 energy compensation per household.  When oil production and refining is returned to the oligopoly, strict guidelines must be observed.

Windfall profit taxation will continue the trend that is economically enslaving Americans.

Answer 4

There is no way to solve the energy crisis in the short run because anything we do to increases supply  (drilling, building new refineries) will take years to have an effect. Likewise we will only reduce demand by replacing our cars with more efficient ones which will also take years. A windfall profits tax could be used to fund alternative fuels not lower prices. It could also be used to  replace other tax revenue and reduce taxes on low income people who are especially hurt by the high prices.