Time to tax oil profits

I salute Donald Hayden for arranging the public repossession of his logging trucks, “Diesel prices force logger to give up 3 trucks” (BDN, March 29). It was a courageous move, and ought to spark some reasoned discussion and, one hopes, action.

Over the past several months, our collective hand-wringing has focused on the subprime mortgage problems. The credit crunch spawned by the mortgage crisis is a problem, but the real culprit is energy prices that are unsustainably high. The idea that sending $600 to individuals will boost our confidence, trigger spending and put our economy back on track is ludicrous and insulting. If I’m spending less on garden variety consumer items, it isn’t because my confidence is shaken; it’s because my gas and oil bills are too high.

We are more than a day late in designing a reasonable energy policy. But we can start. One strategy is a windfall profits tax on big oil. As a one-time proprietor of a small business, I understand there is a point at which taxation chills productivity. The eye-popping profits pouring into oil companies are not the result of clever business planning or sophisticated strategizing. They are pouring because of dumb luck. Commodity futures speculators, not business acumen, are driving the price of oil up.

Because of this, imposing a surtax on profits above a certain level can’t operate, as it arguably sometimes does, as a drag on productivity.

The revenue from the tax can be used to invest in the creation of alternative sources of fuel, so our economy is not so vulnerable that it screeches to a halt when there are rumors of an impending dust up between two or more oil producing countries or a storm looming in the North Atlantic.

The Hayden family and others deserve, at a minimum, that we start talking in a serious way about energy policy.

Barbara Crider

Acton