Taxing the Oil Comapnies' Hot Air, a column by Mark Weisbrot and Dean Baker- by Mark Weisbrot and Dean Baker
Last October twelve U.S. Senators sent a letter to nine major oil companies, asking them to donate part of their record profits to help poor Americans faced with large increases in their heating oil costs this winter. Only one oil company – CITGO, which is owned by the government of Venezuela -- responded. CITGO has now established programs to supply heating oil to low-income communities in Boston, New York City, Maine, and Rhode Island at discounts of up to 40 percent.
Given the record oil profits taken in by U.S. companies – Exxon-Mobil, the largest, raked in nearly $10 billion in profits in just the third quarter -- it is amazing that they did not have enough sense of public relations to spend just a small fraction of one percent of their profits for something like this. But Americans do not have to rely on voluntary contributions by the oil companies. Our government has the power to tax U.S. corporations, and a “windfall profits tax” has been used before in situations where this industry is drowning is a sea of cash.Such a tax would be temporary – maintained only while high oil prices permit unusually high profits – but it could generate substantial revenue. The latest (third quarter) numbers show our oil industry profits running at $70.8 billion at an annual rate. The average over the last five years was just $24.3 billion, leaving a windfall profit of $46.5 billion.
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