Thank goodness Republicans had the good sense to stop a bill last week that would have applied "windfall" taxes to the nation's five largest oil companies.
No doubt, Republicans also are thankful they didn't have the votes to abolish the filibuster a few years ago when they were the majority in the Senate. Without that procedure, which requires a 60-vote majority to overcome, the windfall bill may have passed. Of course, it would have faced an eventual veto from the president. But the filibuster may come in handy some day if the White House is occupied by someone who cares more about feel-good legislation than real economics.
All Americans need to understand this: Slapping a tax on big oil won't bring prices down at the pump. For one thing, it would attack the wrong source. Oil companies don't set world oil prices. For another, it probably would increase gas prices and make it economically impossible to produce more oil domestically. Simply put, companies don't pay taxes. Their customers do.
The premise of the bill is that large oil companies have suddenly become greedy, unlike a few years ago when they kept prices reasonable. True, their profits have been high in real terms as oil prices have risen, but their profit margins remain in line with other businesses.
The bill was vague to the point of being meaningless. What, exactly, is an "unreasonable" profit? The bill didn't say, although it did require a tax on any oil company that made one.
The bill also would have rescinded tax breaks the oil companies receive. But, of course, the other way to look at that would be as a tax increase on the companies. Again, that would have been passed on to customers, or reflected in a curtailment of domestic production.
Instead of punishing oil companies, Congress should be making it easier for them to explore for more oil. Lawmakers should allow drilling in Alaska, and they should make it easier to construct refineries.
Alternative fuels are worth exploring, as well, but they cannot solve the nation's immediate crisis, which is making virtually every product and service more expensive.
Americans don't need a symbolic slap to the face of big oil to make themselves feel better, especially if it only makes them feel worse in the long run. They need reasonable, well-considered policies that truly address the problem.