Thursday, December 04, 2008

Two Points of View

As some of you know, Obama is no longer planning on passing a windfall profits tax on Oil Companies, which was a campaign promise. Well here are some responses to this choice, the first by David Sirota.
Between this move and the move to wait to repeal the Bush tax cuts for the wealthy, it seems like the Obama team is buying into the right-wing frame that raising any taxes - even those on the richest citizens and wealthiest corporations - is bad for the economy. Of course, that frame is debunked by history. And while sure, it's OK to rack up deficits so as to spend our way out of the economic crisis, it's sorta silly to ignore the tax moves that could be implemented to limit those deficits where possible.

Oh, and one last thing - if oil prices are down and oil industry profits are truly down, what's the harm in passing a windfall profits tax?
And here's a contrasting view by Josh Marshall
I'm not sure I get the response to Obama's apparent decision to shelve the windfall profits tax on the big oil companies. As the name implies, windfall profits taxes are intended to tax windfall profits. But the cost of oil has now dropped to something like a third of what it was when this idea was floated. So I'm really not getting how this is breaking a promise or currying favor with the oil companies. This seems like a pretty straightforward case of adjusting policy to take account of demonstrable and undeniable changes in the economic picture.
I think the factor both gentleman leave out is the political capital which must be expended to keep this promise, which causes me to lean a bit more towards Marshall's point of view.

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