Taxing Consequences
28 April 2006
Editor, The Washington Post
1150 15th St., NW
Washington, DC 20071
Dear Editor:
Michael Kinsley is uncharacteristically careless when he writes that a windfall-profits tax "would have no effect on the incentive to extract more oil from American ground" ("Tax the Windfall," April 28). A 1990 study from the Congressional Research Service* found that the windfall-profits tax in place between 1980 and 1988 not only brought in a mere 20 percent of its forecast revenue, it also reduced domestic production by up to 4.8 percent.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* Salvatore Lazzari, "The Windfall Profits Tax on Crude Oil: Overview of the Issues," CRS Report 90-422 (1990).
Posted by Don Boudreaux on
Friday February 9, 2007 at 4:11pm