As oil prices have hit record highs along with oil company profits (and thereby the returns to shareholders), many in Congress are calling for a windfall profits taxA windfall profits tax is a one-time surtax levied on a company or industry when economic conditions result in large and unexpected profits. Inheritance taxes and taxes levied on lottery winnings can also be considered windfall taxes on individual profits. on oil companies. They argue that those profits are somehow unjustified.
But what about another industry where producers are currently reaping windfalls from previous investments due to skyrocketing commodity prices: agriculture? Should we impose a windfall profits taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. on farmers? According to some in Congress, a windfall profits tax on oil companies would lower the price of gasoline (which is ludicrous). Then by that logic, wouldn’t a windfall profits tax on farmers also lower the price of food?
But of course there is no way Congress would impose a special tax on agriculture. In fact, it constantly does the exact opposite. It gives what is in effect a negative tax to farmers (subsidies), or in laymen’s terms, billions of dollars in welfare to farmers.
Some of the politicians on Capitol Hill are so simple-minded that they just have to hear keywords, and they use that as a signal as to whether to attack that group or industry or reap it special favors. Do you really think they would think through an issue?
Small business: Good
Middle Class: Good (because everyone is in it)