Oil prices have skyrocketed, posing a new risk to the post-pandemic recovery. Feeling the pressure to respond, policymakers have proposed everything from gas taxA gas tax is commonly used to describe the variety of taxes levied on gasoline at both the federal and state levels, to provide funds for highway repair and maintenance, as well as for other government infrastructure projects. These taxes are levied in a few ways, including per-gallon excise taxes, excise taxes imposed on wholesalers, and general sales taxes that apply to the purchase of gasoline. holidays, tapping into strategic reserves, and even rebate cards. One idea that has crawled back from the dead: “Windfall Profits Taxes.”
This idea is seemingly simple: legislation targeted at the “excess” profits of oil companies. However, as with anything in 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. policy, the reality is much more complicated.
But why exactly have windfall profits taxes risen from the grave, and what put them there in the first place? Host Jesse Solis sits down with Tax Foundation policy analyst Alex Muresianu to find out more.