The Blog @ Spolitics

Obama Proposes Windfall Profits Tax on Shareholders

Senator Obama is calling for a windfall profits tax on oil companies, but as the Wall Street Journal points out, with record profits already comes record taxes.

Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any “windfall” tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we’re missing some Obama-Durbin business subtlety.

Now Obama wants to tax them more? Who’s really the greedy one here?

Obama’s rhetoric is disingenuous because it ignores two important facts. First, Exxon is the largest company in the world. That, in large part, is why it’s making record profits.

Second, Exxon (and the other oil majors) is a publicly-held corporation which means it’s owned by shareholders — regular Americans who hold Exxon stock either directly or in mutual funds in their 401ks, IRAs, pension funds, etc. When Obama wants to tax “Big Oil” he’s really talking about taxing plain old Americans who made a sound investment decision. He wants to punish their success and confiscate their returns. It’s hard to imagine a more un-American policy than that.