Windfall profit tax
Conference
·
OSTI ID:5918502
Crude-oil price controls throughout the 1970s have cost the oil and gas industry tens of billions of dollars - money that could have been invested in exploration for new supplies. Passage of phased-in decontrol legislation, however, hinged on passage of the windfall profit tax, an excise tax allowing the federal government to take a portion of what it considers unearned and excessive profits. The tax act created three tiers of crude oil, each subject to separate base prices that are adjusted quarterly; the tax rate applicable to the calculated windfall profit depends on the oil's tier. From March 1, 1980, through its expiration (scheduled for the 1990s), the tax will take at least $227 billion in revenues, and the early total decontrol recently mandated will increase tax revenues this year by $6-$8 billion, bringing the 1981 total taxes to $25 billion. A comparison of these figures with the major oil and gas companies' budgets gives some idea of the potential hydrocarbon reserves that could be discovered were it not for the windfall profit tax.
- OSTI ID:
- 5918502
- Country of Publication:
- United States
- Language:
- English
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