During the campaign, President-elect Barack Obama promised to stick it to Big Oil with a windfall profits tax. At the time, reason explained why such a tax was a bad idea:

Sen. Barack Obama (D-Ill.) is also calling for a windfall profits tax on oil companies. But will it work?

The last time the United States imposed a windfall profits tax on oil companies was in 1980 and it lasted until 1988. The result, according to a 1990 Congressional Research Service analysis, was that the tax on oil company profits decreased domestic production by 3 percent to 6 percent and increased dependence on foreign oil by 8 percent to 16 percent. Keep in mind that the big private oil companies actually control only about 6 percent of the world's known oil reserves—the rest are owned by gigantic foreign national oil companies. And just where do private oil companies get the billions they invest in projects to increase supplies? That's right; their profits.

Obama has now quietly dropped the idea:

President-elect Barack Obama has removed any reference of his promise to implement a windfall profits tax on the oil and gas industry from the Obama-Biden Transition Team website, www.change.gov.

Activists are dismayed:

With the election behind him, President-elect Obama has failed to justify the removal of the windfall profits tax from his tax plan. The subtle and unexplained elimination of this issue from the Obama-Biden agenda should concern Americans from every background. The American Small Business League (ASBL) questions whether the sudden elimination of this issue is a further indication that large corporations are already demonstrating their ability to influence the Obama Administration.

Hooray for economic sanity.

Source:  http://online.wsj.com/article/SB122832703314976321.html

President-elect Barack Obama has quietly shelved a proposal to slap oil and natural gas companies with a new windfall profits tax.

An aide for the transition team acknowledged the policy shift Tuesday, after a small-business group discovered the proposal — touted throughout much of the campaign — had been dropped from the incoming administration’s Web site.

“President-elect Obama announced the policy during the campaign because oil prices were above $80 per barrel,” the aide said. “They are below that now and expected to stay below that.”

Indeed, the price of crude has fallen $100 a barrel since its record close of $145.29 on the New York Mercantile Exchange July 3. Obama had long called for using the proceeds from the proposed new tax to give American consumers an “emergency energy rebate” worth up to $500 per individual or $1,000 per married couple.

Asked whether the energy rebate plan had likewise been put on hold, the transition aide said the rebates were included in a middle class “rescue plan” Obama released in mid-October. That plan calls for a permanent tax cut of $500 for a worker or $1,000 for a family.

From $3.96 to $1.66

American motorists, however, now don’t have to reach as deeply in their pockets to fill up their tanks as they did just five months ago.

On Tuesday, regular was selling for an average $1.66 a gallon in Houston, down from a record $3.96 in July, according to AAA’s Daily Fuel Gauge Report.

The oil industry has been fighting vigorously to ward off a new windfall profits tax.

The American Petroleum Institute, a Washington-based oil industry trade group, argues a windfall profits tax enacted in 1980 cost the industry $38 billion in revenue and the nation as much as 1.3 billion barrels of domestically produced oil, as industry players moved activity overseas to avoid the tax.

“No president who wants to be successful should start with a policy that history has proved to have failed,” said Kevin Book, an oil and energy policy with FBR Capital Markets.

“I think this is a positive sign about the administration being a clear-thinking one. They recognized that refining and oil extraction jobs are still U.S. jobs.”

Book argues, however, that the oil industry shouldn’t become complacent. He calculates various tax proposals likely to come up in the new Congress could cost the industry $28 billion to $35 billion over the next 10 years.

Removed from site

The change in the Obama camp’s thinking came to light when officials at the Petaluma, Calif.-based American Small Business League noticed the windfall profits tax language had been removed from the transition team’s Web site, www.change.gov, in what the group called “an unceremonious and abrupt manner.”

League President Lloyd Chapman said the Obama camp also has dropped a reference to concern that federal contracts designated for small businesses were being awarded to major corporations instead — a key issue for Chapman’s group.

League officials question whether the omission of attention to that matter and the disappearance of the windfall tax proposal indicate that the incoming administration is already being unduly influenced by large corporations.

But industry officials hailed the move away from the windfall tax.

“Certainly, the judgment to withdraw the concept of a windfall profits tax is an important recognition that developing America’s oil and natural gas would be seriously damaged by such a tax policy,” said Lee Fuller, vice president of government relations for the Independent Petroleum Association of America.

Thomas Pyle, president of the free-market oriented Institute for Energy Research, said in a prepared statement: “The president-elect’s decision to reverse course on imposing this Carter-era burden on those who explore for and produce American energy is a heartening development — both for consumers and an economy struggling to claw its way out of a recession.”

david.ivanovich@chron.com

Source:  http://www.chron.com/disp/story.mpl/headline/biz/6143968.html

Reality bites Barack Obama in the ass again.

Here he was in May/June of this year, vowing to punish the oil companies and redistribute the wealth: “I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills,” the Illinois senator said.

And now? Barack Obama is morphing into SNL character Emily Litella. Neeeever mind:

President-elect Barack Obama has shelved a proposal to slap the oil and gas companies with a new windfall profits tax because oil prices have dropped so much in recent months, the transition team confirmed today.

“President-elect Obama announced the policy during the campaign because oil prices were above $80 per barrel,” a transition aide said. “They are currently below that now and expected to stay below that.”

Obama’s proposal had called for using the proceeds from the tax to give American consumers an energy rebate worth up to $500 per individual or $1,000 per married couple.

As Thomas Pyle, president of the Institute for Energy Research, put it: “A windfall profits tax is bad policy at any price.”

Another Obama shift:

Asked whether the energy rebate plan had likewise been put on hold, the transition aide said the rebates were included in a middle class “rescue plan” Obama released last month.

That plan calls for a permanent tax cut of $500 for a worker or $1,000 for a family, with the Internal Revenue Service using 2007 tax returns to send out the checks. Tax cuts also would be extended to seniors.

The policy shift came to light after officials at the American Small Business League noticed that the windfall profits tax language had been removed from the transition team’s Web site in what the group called “an unceremonious and abrupt manner.”

Yeah, that’s happening a lot lately.

Source:  http://michellemalkin.com

It looks like once again Barack Obama is shelving one of his landmark proposals. Not too long ago Barack Obama had reality set in when he decided he may continue the Bush interrogation tactics.

President-elect Barack Obama has shelved a proposal to slap the oil and gas companies with a new windfall profits tax because oil prices have dropped so much in recent months, the transition team confirmed today.

“President-elect Obama announced the policy during the campaign because oil prices were above $80 per barrel,” a transition aide said. “They are currently below that now and expected to stay below that.”

It was around May of this year when Barack Obama vowed to punish the eviloil companies: “I’ll make oil companies pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills,” he said.

It looks like these policy shifts have been changing a lot lately now that he is elected.

Asked whether the energy rebate plan had likewise been put on hold, the transition aide said the rebates were included in a middle class “rescue plan” Obama released last month.

That plan calls for a permanent tax cut of $500 for a worker or $1,000 for a family, with the Internal Revenue Service using 2007 tax returns to send out the checks. Tax cuts also would be extended to seniors.

The policy shift came to light after officials at the American Small Business League noticed that the windfall profits tax language had been removed from the transition team’s Web site in what the group called “an unceremonious and abrupt manner.”

You would think this would anger his voters, but I highly doubt it. After all, they do drink the Obama kool-aid.

Source:  http://www.lancehaynie.com/blog/