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home > by publication type > op-eds > Clinton Caught in Time Warp with Windfall Oil Tax
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| Author: | Amity Shlaes, Senior Fellow for Economic History |
|---|
May 2, 2008
Bloomberg
Jimmy Carter’s in the news again. The former president wants a windfall-profits tax. No wait, he wants America to recognize Hamas. Hillary Clinton is the one who wants a windfall-profits tax.
It seems that every year, usually just around the time Memorial Day slides into view, a politician demands a tax on oil profits. Richard Nixon’s economists offered one up in 1973, arguing, almost vindictively, that they were justified in imposing a stiff levy because the tax would “make up in some degree for windfalls which have occurred in the past.”
Mr. Carter proposed one in 1977, saying his administration “will ask private companies to sacrifice just as private citizens do.” A few years ago Senator Schumer of New York put forward a tax in the name of funding a $100-per-family income tax credit.
Senator Clinton has couched her support in terms of the hunt for revenue: “I’m the only one with a plan,” she said earlier this week. And lots of other Americans, not just Democrats, are eager for a break at the pump.
What to make of it? Insanity has been defined as doing the same thing over and over again, and each time expecting a different result. By this definition, a new windfall-profits tax would suggest a sort of collective insanity. For, as our country’s history with the great Windfall-Profit Tax of 1980 amply demonstrates, there are lots of reasons to oppose such a tax.
The first is that such taxes tend to yield disappointing revenue.
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