It seems that economists are in disagreement over the advisability of taxing the "windfall" profits of the oil companies. However, it is a no-brainer to put an immediate halt to the ridiculous subsidies that Big Oil currently enjoys. ("Levy is needed on oil profit windfalls," Consumer Confidential, May 4.)
I understand why the two oilmen in the White House have not acted on this issue, but where has the Democratic congressional majority been? Why haven't the three presidential candidates come out strongly on ending these absurd gifts to the oil companies?
The subsidies could be redirected to the development of alternative energy sources. This certainly would be more beneficial than the gimmicky "gas-tax holiday" that McCain and Clinton are advocating.
I think you are correct that windfall profit taxes are not likely nor perhaps appropriate, but something other than price has me angry at oil companies.
At congressional hearings this spring, executives from several of the oil companies said the reason they were not investing in alternative energy was because there was no short-term benefit for shareholders. I guess, like many other industries, they don't care about the customers or the long-term future of the company as long as they meet quarterly goals and get their high pay and retirement benefits. Instead of a windfall tax, how about a levy on petroleum to pay for research and development on alternative energy?
I agree that profits are not undeserved. As a retired citizen, still holding a few shares of Exxon (with fingers firmly clamped around my nose), I would like to point out that the shareholders are not seeing drastic gains in their profits, short of selling. Dividends have risen, but not by much.
But I do think that the time for subsidies is over for these behemoths. I propose using a windfall profit tax as a bargaining chip: Either allow the repeal of all subsidies, or expect them to be offset by additional taxes. Then use the subsidies to fund public transportation.