Windfall profits?

(A blast from the past)

Remember the hue and cry a month ago, about the oil companies "gouging"?

[I]n our nation's capital, the town of a thousand-and-one second chances, Congress designed something dubbed the Windfall Profit Tax (WPT) in 1980. Less than a decade later - mere days on the bureaucratic time-clock - the tax was lifted after being judged by almost everyone to be a colossal failure.

Consider the recent Congressional hearings over the run-up in gasoline prices following the worst hurricane season in record and its flagship storm, Katrina, the worst natural disaster in American history. Treated like criminals for making profits, oil company CEO's were paraded before a joint hearing of the Senate Energy and Commerce committees to justify their earnings as senators from both parties beat them like piñatas on national television.

According to a study by the non-partisan Congressional Research Service, the original windfall profit tax a quarter of a century ago, reduced domestic oil production by somewhere between three and six-percent from 1980-1988. As a result, it increased foreign oil imports from between eight and sixteen-percent - exactly the opposite of its stated purpose. To top it off, by the end of its run, the WPT had generated virtually no revenue. It was repealed and left for dead in 1988.