President Joe Biden has accused oil companies of “war profiteering” and is threatening to impose a windfall tax if they fail to boost domestic production — and improve the Democrats’ fortunes in the 2022 midterms. It is ugly political theater. Demanding private entities act on behalf of the party or face punishment from the state, as the president might say, is semi-fascisty behavior.
Other than appealing to the anger and frustrations of economic illiterates, windfall taxes (a tax on allegedly excessive, or unfairly obtained, profits) make zero sense. They neither bring down the price of energy nor increase supply. All windfall taxes do is disincentivize oil producers — their business already facing an existential threat from Democrats — from investing in long-term production. And, as with all corporate taxes and regulations, the cost will be passed to the consumer. …
By the way, clean energy is also seeing historic profits (granted, it’s a rickety business built on state mandates and subsidies.) Do they get a windfall tax for “war profiteering,” as well? Or is it just the companies the left despises?
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