Windfall Profits Tax

(Opinion alert)

This is a follow-up to my opinion-based post on Barack Obama's proposed Windfall Profits Tax entitled Commy Obammy. I brought up this proposed tax in a discussion forum and somebody mentioned the Windfall Profits Tax of the 1980's, which I hadn't heard about before. When I looked it up, I was horrified (yet not surprised) to find that the 1980 Windfall Profits Tax was a failure in exactly every single way I predict in my opinion post.

(Fact)

Jimmy Carter enacted the 1980 Windfall Profits Tax because he felt the oil companies made huge profits unfairly due to the OPEC oil embargo.

In 1988, Ronald Reagan repealed the tax. Here are some of the reasons why:

• The tax brought 80% less in taxes than was predicted. Almost $400 billion was predicted, but only about $80 million was taken in tax revenue.
  
  
• The tax reduced domestic oil production. Estimates are uncertain, but the amount of oil production lost because of the tax was between 1% and 5%.
  
  
• The tax increased America's dependence on foreign oil significantly. Estimates are uncertain, but oil imports increased by between 3% and 13% because of the tax.
  
  
• The tax caused incentive for the oil companies to focus less on research and more on reducing the cost of current practices.
  

Library of Congress Link

(Opinion alert)

This is simple logic! Obama supports a tax that is proven to fail!

See, Sparky? I told you! I am not (simply) a lunatic!