We’re appalled that Sen. Barack Obama has proposed a penalty on windfall profits as a way of attacking rising gasoline prices.
We would be even more appalled if the American people bought into the candidate’s proposal, a sound bite really, without raising serious questions and demanding full details.
A windfall profits tax on oil failed its objectives a quarter-century ago, so why should it work today?
To this point, Obama has not told us that.
We can’t imagine Congress again buying into such a proposal, which it would have to do to make Obama’s plan, if he has one, a reality.
We also wonder whether Obama would propose taxing the profits of every company whose prices he thinks are too high.
Don’t get us wrong. We’re not happy, either, about paying record prices for gasoline, diesel fuel and heating oil. Those prices are a chief reason why our economy is on the fritz.
But if the American people want to see lower gasoline prices, the first thing we must do is change our driving habits. If oil companies find themselves with large stockpiles, the price will come down.
That’s the law of supply and demand, which ultimately affects prices.
Maybe you’ve seen Obama’s commercial. In the 30-second spot, titled “Nothing’s changed,” he discusses his commitment to change Washington so that we can finally break our dependence of foreign oil and curtail rising gas costs.
“Since the gas lines of the ’70s,” he says, “Democrats and Republicans have talked about energy independence ... but nothing’s changed. Except now Exxon’s making $40 billion a year and we’re paying $3.50 for gas.
“I’m Barack Obama. I don’t take money from oil companies or Washington lobbyists and I won’t let them block change anymore. They’ll pay a penalty on windfall profits. We’ll invest in alternative energy and create jobs and free ourselves from foreign oil. ...”
In 2006, politicians from Washington, D.C., to Pennsylvania – including Gov. Ed Rendell – to California revived talk about a legislative fix to the oil-price spike.
A windfall profits tax existed on oil from 1980 to 1988, when it was abolished after bringing in revenues far less than had been projected.
We’ve encouraged the presidential candidates to focus on the serious issues facing our nation. Perhaps that’s what the senator thinks he’s doing with his one-liner.
But if Mr. Obama has what he thinks is a solution to the record gasoline prices, we urge him to spell it out now so we can start to get our economy back on track.