Wednesday, December 03, 2008

Why Governor Doyle had a Bad Day

Obama is now dropping his support for a windfall profits tax. This must be giving Jim Doyle a headache.

Obama will be going around saying that a tax is not needed because the price of oil dropped and the oil companies profits have decreased. Doyle is stuck without the cover of the party line, and we'll see how he explains the fact that the leader of his party thinks its a bad idea.

More bad news. His hometown paper
editorialized against the proposal on the very same day. Ouch.

The logic behind the windfall profits tax was always particularly interesting. Oil companies are making record profits at the expense of the hard pressed consumer so lets tax the profits! Well, other corporations have made larger profit margins than oil companies, but lets concede that point for a moment. A windfall profits tax isn't going to make gas any cheaper. It isn't going to INCREASE production The companies will a)pass the cost on right back to the consumer. b)Restrict supply as it can not sell it at the market price.