Profit Tax on Oil Companies revisited

Republican Arlen Specter has helped renew the call for a profit windfall tax on oil companies. The windfall tax was an idea promoted by Hillary Clinton after Hurricane Katrina, which would tax excessive profits in the industry. The idea behind the tax is the prevent price gouging, where companies seize on political events to inflate the price of oil and gasoline.

What was surprising about Specter’s call for the tax is that, as a Republican, he has come out against corporate control. “They get together, reduce the supply of oil, and that drives up prices.” He has called for stricter anti-trust laws preventing huge oil mergers, such as the Exxon-mobile merger a few years ago. Anyone who studies basic economics knows that monopoly and oligopoly businesses are bad for consumers, and good for profits. And anyone who read my post, or other similar news reports, knows that profits don’t mean employment. It’s good to see a Republican speaking out for the common good, even if this is political grandstanding. It shows that cooperation is possible in solving some common problems for all Americans.