July 2, 2008 01:43 PM | Permalink |
In the past month, lawmakers beholden to the oil industry blocked consideration of a bill (S. 3044) that would shift tax subsidies away from oil and gas companies to alternative energy investments. This legislation also included a windfall profits tax on oil companies.
If Congress wants to raise revenue to encourage the development of alternative energy, it makes sense to start, as this bill would, by closing the tax loopholes that favor oil and gas companies. These loopholes in effect provide a subsidy to oil and gas companies that other firms do not receive.
Many of these subsidies have existed for years and have surely helped boost the profits of oil company shareholders. As this paper explains, the American public has received little, if anything, in return. Congress can recoup some of the benefits showered on the oil and gas industry over the years by implementing a windfall profits tax.