Senator Obama has proposed a windfall profit tax on “Big Oil.” I have seen commercials in which he calls it a penalty. That struck me as a socialist message. A Penalty? The government will penalize a company for it’s success? Who determines what is too much? As a percentage the oil companies have made between 6 % and 11% but the numbers are huge. Do you really want the government to determine who makes too much money? And if oil is “penalized” for a 10% profit, why not the pharmaceuticals or media companies that often make over 20%? Where does it stop? Here is a recent story.
Now, here’s the kicker. ExxonMobil paid $30 Billion in taxes in 2007 and $28 Billion in 2006! Bet you never read that or heard that in the news. Why? In 2006 that was a 41% tax rate! Is that not enough? Is not more tax a risk of killing the golden goose? If you tax too much, then you risk hurting the business and your tax revnue actually decreases. This happened when under President Carter we tried a windfall profit tax on oil companies. Is it justified in a supposed free market economy that the government take more than 40%? Would you want to pay 40% taxes? Here is the story: