Biden’s Flim-Flam Windfall Profits Tax

“Dumb and Dumber” is a 1994 comedy; today it could describe a tragedy … Joe Biden’s energy policy. His latest gambit is to call for a windfall profits tax on oil companies, accusing them of “war profiteering.” He says the large earnings being raked in by oil giants like Exxon and Chevron “are not because of doing something new or innovative.” Instead, Biden said, “Their profits are a windfall of war…”To be clear, Mr. Biden has no idea whether oil producers are doing anything innovative. While he has met with the leaders of numerous industries and Big Labor groups, he has childishly refused to meet with oil industry executives. I’m pretty sure he has never visited a drilling site or offshore production platform, where advanced American technology — the best in the world — is on display. If he talked with industry executives, they might point out that energy is cyclical; the price of oil rises with demand, unless supply goes up more. They might remind him that Exxon lost $22 billion in 2020 because prices fell during the pandemic; naturally Exxon didn’t receive a government handout to compensate them for that gigantic loss. Why should the firm be penalized when prices go back up?The president is flailing, desperate to haul out something — anything — to show voters he’s acting to lower gasoline prices. But this is utter flim-flam. Only Congress can impose a windfall profits tax on energy companies, a proposal that would land well with liberal Democrats but is likely to find zero support among Republicans. There is no way today’s narrowly divided House or Senate would enact such a controversial and self-defeating measure; if the polling is correct, the Congress to take charge in January will be even more firmly opposed to the idea.Even the New York Times described Mr. Biden’s latest gesture as “more of a way to pressure the oil firms than a realistic policy prescription…” The president knows this, but is hoping to fool voters into blaming Big Oil for their misery rather than Joe Biden. Fat chance. In a recent CBS/YouGov poll, over half of respondents blamed the president and his fellow Democrats for high gasoline prices. Mr. Biden thinks oil companies that are paying dividends to shareholders are behaving in their “narrow self-interest.” Here’s the real howler: Mr. Biden criticizes the oil firms for not investing “in America by increasing production and refining capacity — because they don’t want to do that.” Anticipating pushback on that ridiculous claim, Mr. Biden argues “they have the opportunity to do that” and that doing so would lower “prices for consumers at the pump.”Unpacking this tangle of nonsense is almost unnecessary. The reason that over half the country blames Mr. Biden for inflation is because people draw a direct line between the president’s policies meant to stomp out fossil fuels and high gasoline prices. Americans know that prices at the pump started to climb well before Russia invaded Ukraine; the average price for gas at the beginning of August 2021 was $3.16 per gallon, up 40 percent from $2.25 when Mr. Biden took office seven months earlier — and up 45 percent from the year before. Mr. Putin didn’t attack Ukraine until February 2022.How did Mr. Biden manage to dumb down oil and gas production in America., the world’s largest energy producer? In part by suspending leases on federal lands, delaying drilling permits, restricting new offshore lease sales and taking promising Arctic lands off the table. In addition, as gasoline prices topped $4 per gallon this past April, the White House hiked royalty rates on production from federal lands by 50 percent, the first rate increase since royalties were initially imposed in the 1920s. At the same time, Mr. Biden’s crack energy team cut back planned lease sales by 80 percent. Just recently, in the Inflation Reduction Act, Mr. Biden imposed new fees on methane emissions produced by oil and gas drillers. Did he think those measures would spur more production?More significant has been a concerted effort to dissuade investors from backing fossil fuel projects and firms. Climate activism, discouraging lending to or buying the securities of oil and gas companies, has burrowed into policy-making at financial regulatory agencies like the Federal Reserve, the Securities and Exchange Commission, and the Federal Comptroller of the Currency. Enacting a windfall profits tax would make it even clearer that oil and gas companies would be better off investing outside America. In addition, siphoning billions of dollars from the very firms that can render us again energy independent, would be idiotic. In effect, Mr. Biden wants to impose a windfall profits tax on oil and gas producers benefiting from his very own policies. Dumb … and dumber.

Biden’s Flim-Flam Windfall Profits Tax

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