Obama's Windfall Taxes Shift: First Broken Promise?

The Obama team's decision to drop the idea of forcing oil and natural gas companies to pay a tax on their windfall profits has caused a firestorm among liberals and small business coalitions.

As first reported in the Houston Chronicle, Obama's reference to a windfall profits tax, which he articulated during the campaign at a time of skyrocketing gas prices, had been removed from the transition team's Website, change.gov:

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."

At liberal blog Campaign For America's Future, David Sirota writes:

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? Even if you buy the right-wing nonsense about a windfall profits tax "hurting the industry" or "hurting the economy" when it is applied, if there really are no windfall profits to tax, then it won't be applied.

On Mother Jones' blog, Nick Baumann wrote a post asking, "Did Barack Obama just break his first camaign promise?":

Obama talked about a windfall profits tax as early as April. As crude oil prices topped $110 a barrel, Obama promised to "put a windfall profits tax on oil companies and use it to help ... families pay their heating and cooling bills and reduce energy costs." And in August, the Democratic nominee issued a campaign ad that promised "a windfall profits tax on big oil to give families a thousand dollar rebate." The windfall profits tax was a key point of contention between President-elect Obama and McCain in June, when McCain criticized Obama for the plan, calling it "dangerous".

The removal was noticed by the American Small Business League which fumed in a press release:

The American Small Business League questions whether the sudden elimination of this issue is a further indication that large corporations are already demonstrating their ability to influence the Obama adminstration...

President-elect Obama owes the American people an explanation as to why these campaign promises have been pulled from his agenda.

Comments

[PostRacialBlackGirl]

Can you guys please trust the man - check this out...
http://hakashamut.wordpress.com

[peacekitten]

i do.

[strict3]

what does your name mean/>?

[strangerinthenight]

I trust him. Give him the credit that he deserved, and also to remind him of his promise, if his actions gets far away from those promises.

My generation, 26 and under will hopefully be more active in this national discussions. Generations before us relied on words alone. Promises, Promises. That my generation will demand accountability and not depend so much on rhetoric.

No question, I give him the benefits of the doubt, but as a voter, I will not surrender my right to voice an opinion, if he goes astray to his commitments.

[smartestliberal]

You need to re-figure your list of Obama's broken promises. Start with taking public funds for the general election campaign, add his vote for FISA [immunity for phone companies], & then add virtually every appointment he's made since the election.
I was one of Obama's earliest supporters, & like many in my position, believe Obama has betrayed our support. So far Obama is on pace to beat Richard Nixon as the biggest liar-president in history.

[allonfla]

HE NEVER YOU anything when it came to who he would appoint. NEVER. You want to be mad about FISA, fine. But don't kid yourself on public financing.

[peacekitten]

he hasn't taken the oath of office yet. i wasn't thrilled with his FISA vote, but he did promise to revisit the issue, and i believe he will, now that he has a congress under him that will allow him to get somewhere with it.

so far, obama is working like an s.o.b. for us, and he hasn't been sworn in or gotten the raise yet. he is too smart not to realize that he's got enormous obstacles in front of him, and that he's got to figure out how to make everything he wants to do work. don't forget that gates made the statement, that got NO attention, that the 16 month timetable is something he intends to stick to, and he is NOT going to simply be a caretaker of a disastrous situation.

try really, REALLY listening, and get your news from somewhere besides the msm.

[billybam]

First of all, the fact that you call yourself the "smartest" anything should be a tip-off that you are not. Second, Obama did not make any 'promise' to use public funds. He indicated that he would negotiate this with the GOP rival. The GOP did not want to reign in the 527s and they wanted this 'townhall' meeting schedule agreed to with FOX News as the sponsor. Senator Obama did cast that vote for the FISA bill that included immunity. While I too disagree with that, it was not a campaign promise. And finally, regarding the cabinet. You seem to be stuck in the idea that the person in the cabinet position sets policy, or at least the tone. This is the Republican way. It looks to me that Obama has selected persons that are effective in their particular area, but Obama will set the policy, and not the cabinet position. Personally, I applaud the concept of different opinions and viewpoints, but with a strong leader who will consider all the permutations and then act accordingly. We have had too many "yes men" recently with disastrous results.
You sound like a concern troll to me.

[strangerinthenight]

I never doubt for one moment that Obama is a good man. Indeed he is. The oil issue is one of the biggest contention between him and McCain. He most definitely promised the windfall profit tax. I don't need to point out that for too long, we struggled hard to keep those tank full, but for the last 5 years, it has been extremely difficult. It seems the oil company is getting their ways all the time. Obama's team made it their major promise - and suddenly, out of the blue, they scrapped this.

FISA is also a disappointment, but I do believed the phone companies were under the gun, and more likely coerced. I recall one company who declined to give the info, and their CEO was indicted for unrelated charges. They will come after you. Obama is a Constitutional lawyer, and 'am so disappointed with his FISA decision.

As to public funds, well I give him a pass, although, during the primaries, he changed his mind.

I would not call him a liar though. I would just prefer to be more of a straight shooter. People appreciates being told the truth, even if it hurts. At leas I do.

[strict3]

+ peacekitten See Profile I'm a Fan of peacekitten I'm a fan of this user permalink
you don't get it.

if a bunch of people decide individually to be greedy all on their own and it happens at the same time, it is NOT a conspiracy.

was it a "conspiracy" when that poor walmart employee was trampled to death by greedy, uncaring people who didn't know him?

why do you think that simple logic is a "conspiracy?" that is really most strange.

DOES ANYONE ELSE SEE WHATS WRONG WITH THIS POST??

[BlueStateMan]

No.

[strict3]

what blue?? NO what?

[peacekitten]

do you not realize that a conspiracy requires people to have knowledge of each other's plans, and for them to be working together towards a common end?

unless ALL the oil speculators got together and held a BIIIIG meeting somewhere and said, hey, let's go to the trading floor tomorrow and drive prices sky high just because we can, there's NO PROOF of a conspiracy. they didn't do this, ergo, it wasn't a conspiracy.

many of them saw a loophole, and decided on their own to jump through it. and voila! oil prices went through the roof.

when people in a market place, i.e. consumers, decide that they could no longer consume at their past rates because of the rise in prices, demand drops. in order to stimulate demand, prices drop. see how nifty that is? again, IT'S NOT A CONSPIRACY.

[strict3]

so it was an accident or they were lucky that oil went up?? abd they said it was becuase we were running out bla bla bla....energy independence......bla bla bla....

i dont want to argue this point any more its obvious to me that when cheney went to saudi arabia and held meetins and a month later the oil prices came down...

i think it was a conspiracy



Definitions of conspiracy on the Web:

a secret agreement between two or more people to perform an unlawful act
a plot to carry out some harmful or illegal act (especially a political plot)
a group of conspirators banded together to achieve some harmful or illegal purpose
wordnet.princeton.edu/perl/webwn

[strangerinthenight]

unless ALL the oil speculators got together and held a BIIIIG meeting somewhere and said, hey, let's go to the trading floor tomorrow and drive prices sky high just because we can, there's NO PROOF of a conspiracy. they didn't do this, ergo, it wasn't a conspiracy.

Yes - that happens a lot !

[1003]

As an Ex Republican, I can see my ex colleagues are at work on the blog, telling us how they voted for Obama and so on. Please, I know how this game work my friends, I've been there and done that. Nothing but Republican operatives posing as progressive on this blog. Wake up! You have been punked by the Reptiles

[Pronto]

The Left b a s h inefficient companies like Chrysler and GM for being inefficient and they b a s h efficient companies like Wal-mart and Exxon for being "too profitable" and "greedy". The mind set of the Left.

[strict3]

wallmart uses slave labour and our government condones it........the oil compnies have enough power to invade a country they have..........SEE THE PROBLEM

[BlueStateMan]

Not at all....

It's not about "inefficient" or "profitable"... it's about CORRUPT.

[strict3]

YES CORRUPT......I LIKE THAT

[peacekitten]

corrupt and utterly AMORAL.

[Pronto]

So, you want to bail out the auto industry because it is "corrupt" and you want to impose a windfall profits tax on Exxon because Exxon is corrupt. Oh, I get it.

[peacekitten]

walmart is a p a r a s i t e. they don't pay a livable wage, and give seminars to their new employees teaching them how to work the public safety net system such as food stamps, free clinics, hospital emergency rooms and the like to make up for the fact that those are things that the pay level of walmart doesn't allow them access to. all the while, those at the very top amass obscene fortunes they pay very little taxes on.

that's your model for efficiency? substandard wages, and a workforce dependent on benefits paid for by other taxpayers at large for their survival? i would think such a thing would be anathema to you.

[strict3]

they pay there workers in china 1 dollar a day........1 dollar....and they also use kids

[Pronto]

A company or a business has no resposibility to pay for their employees health care. Government agencies advertise the availability of food stamps so why shouldn't Wal-mart let their employees know of such programs? And who should determine what Wal-mart should pay their employees? You? If you are so outraged, start a mass merchandsing store, pay your workers a livable wage and pay for their health care. And, good luck. You're gonna need it.

[goldrush]

All of you rpeople need to wake up and stop playing petty partisan politics. This crisis is the final nail in the coffin of an inflationary monetary policy built on nothing but the full faith and trust of the government. It is a fiat money and was welcomed by both parties because it allowed them to spend a lot more than they could tax. A fiat money has never survived in the entirety of human history, so it's pretty egotistical for us to think that we can do it because we're America. Once the money implodes people have to start over; bartering, usually, or finding a new money to replace the old. The dollar is dead and we need to realize that.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3526645/Citigroup-says-gold-could-rise-above-2000-next-year-as-world-unravels.html

[BPCentrisAmerican]

Pretty soon oil and gas are going to be in front of congress hat in hand just like the banks and the auto companies asking for subsidies, this time tell them to STICK IT.

[MattMartin]

I voted for Barack. I contributed to his campaign, knocked on doors and made phone calls because I really believed that he would actually bring change to DC. I believed that his campaign promises would actually be politics he would bring to DC. But with this flip-flop, and others, it leads me to quote the Rev Wright "Barack is a politician" --- and I guess that says it all!! Change is another word for Status-Quo, I'm sorry to say.

[strict3]

why are you sorry??

if more people would have woke up to george bush early on we might not be in the position we are in today......i think obama wont last long before even his most loyal supporters start opening there eyes...i wanna se michael moore or that ph ony oprah .....say they were wrong...untill then.......

[bigironal25]

I voted for Obama and it's starting to look more and more like I'll be voting for somebody else in 4 years! I sucked up his vote on FISA and for his vote for the financial bailout , and the fact that he won't go after these a**holes who approved torture and now he won't be closing Guantanamo! Barack Obama has lied to all of us who voted for him!Last November ,I had to vote for Obama but I won't be so inclined ,the next time around!

[Melkor]

I'm afraid I disagree. This is shaping up to be a movement built around Obama - not any ideology, policy or principle. He's going to be immune from criticism for quite some time, no matter what he does.

[BlueStateMan]

Changetroll preemptive chest-beater #1.

[strict3]

blue what is that exactly..if someone isnt happy with what their candidate is doing why do you call them names??

[bbridges1962]

Did someone take your lunch money again, bluestateman?

[allonfla]

I have come to the conclusion that the Left has mush for brains. Do any of you know that HuffPo and an activist group stirred up this controversy? They have been running this same story for the past 5 days - each story under a different author - debuting on different days in different sections of the website. It wasn't getting the attention they wanted so they hyped it up, put it on the front page and now look it has over 3,000 comments of pure bull. Did you notice that not one single person in the Obama transition team was quoted with an actual NAME. Who is this aide and if this decision is official why is he remaining anonymous. All the quotes with names are from bloggers or activists that do not have a clue about what is going on inside O's team.

[JonnyLuck]

To echo what other people are saying, why aren't the talking heads and bloggers paying more attention to what Bush is doing with his last days in office? All reports I've heard make it clear that he's going to make Obama's job even harder, because he's passing all sorts of under-the-radar policy changes and making career appointments of political operatives. Let's get our priorities straight! Cover the CURRENT president, please!

[gi]

ALL THESE IDIOTS WANT INSTANT MIRACLES FROM OBAMA. NOT TO MENTION ITS NOT JAN. 20. 2009 YET. With EIGHT YEARS OF BUSH MESS,
they expect him to come in with a MAGIC WAND and make all the F--CK UP THINGS DISAPPEAR. Now PE OBAMA wave the magic wand and create all the jobs wave the wand for all the things that you promise. Now wouldn't that be nice.

[gi]

BlueStateMan you think you know so much run for PRESIDENT 2012!!!!

[RightWingMarine]

what is a windfall profit? At what point to profits stop being just profits and become windfalling profits?

If we decide to tax companies on their windfall profits (whatever those are) does this mean we are prepared to set a level of profits that are acceptable and if the company falls below that the government will stip in and boost their profits back to this acceptable level? What about ensuring that no business suffers a loss? If we are prepared to take their profits for them in their years of plenty why sshouldn't we also be prepared to shore them up during their lean years? If we hadn't taken their money when they were doing well they would still have it when the company wasn't doing so well.

[Pronto]

Correct. There is no such thing as a windfall profit.

[BlueStateMan]

If you buy an ugly painting of a matador on velvet at a garage sale because you like the frame but when you take it apart, you discover a forgotten Van Gogh... THAT'S a "windfall profit".

It's an unexpected profit arising from causes not controlled by the recipient.

[Pronto]

It is "luck" not a windfall profit. And, even it was a lucky "windfall profit", why should the government get a piece of your luck? The government had NOTHING to do with your garage sale purchase. NOTHING.

[RightWingMarine]

the recipient does not control profits or cause them. They may set the circumstances that are in their control to encourage sales that may lead to profits but there is no guarntee.

Again, if we are going to take "unexpected" profits will you likewise be prepared to step in and pay off "unexpected" losses? Now I know that currently the government is bailing out businesses so really the question becomes do you agree with the bailout? If you do not then by what right do you believe you have any claim to the profits of a company you have not invested in? If you do then what possible reason could you have in shoring up a business unless you believe it will recover and you can plunder more out of it than you put in?

[BPCentrisAmerican]

When oil was 10 bucks a barrel, oil and gas got huge tax breaks and subsidies, they still owe money to the Federal government on leases of tax payer land and there sitting on huge tracks of land on which they are not exploring for gas and oil, yet they want to be granted more leases in National Parks and 3 miles offshore, these people have been sucking on the federal tit since oil was discover here in the 1800s. They have enjoyed most favorite corporate status for a very long time, than they turn around a screw the nation that has given them tax relief, free tax payer land, even letting them off the hook when a devastating oil spell takes place, Alaska. We have sacrificed our children in wars to protect oil interest. I have a Marine buddy who has severd in Iraq twice and he has no illusions why he was put in harms way for, and it wasn't WMD, 9-11, or democracy, it was for geo-political politics, translated big oil and bases. After he had to wait 2 years for his signing bonus, he told me, if called up again, he's not going back.

[ltva]

The man has not even taken the oath of office yet. He is President-elect. How can you say he has broken a promise? Give the man a break. I think any criticism of President-elect should not be made until he is actually sworn in and has been president for at least 100 days. All other presidents have gotten that grace period and respect; give the same to Obama. After all, look at the big mess he has to try to clean.

[strict3]

thats all ive heard is give him a break so far..on his ociks his positions on the fact he voted for the bailout/......please gimme a break

[feyangel]

I think it is AMAZING how folks are nit-picking every move Obama makes looking for some level of betrayal or deceit or short-falling. If only they had paid so much attention-- and been so swift to speak up-- during the Bush years.

What I am hearing on this issue is that RIGHT NOW because oil prices have dropped it is not an URGENT issue-- so it is tabled for now, giving Obama and his crew time and energy to focus on things that ARE still urgent. That is called effective time and energy management.

Read some books. URGENT stuff gets dealt with first, important and/or less important stuff gets dealt with either on a schedule, or when it becomes relevant again.

[strict3]

we are alot smarter and wiser to the bu llshit then 8 yrs ago.........

[strict3]

I was really hoping that OBAMA would flip flop on hunting bin lad en or implimenting a crabon tax for the fake global warming.....oh and just leaveing iraq and afgan would be a good one too....while hes at it he should try and stop that bailout that he voted for...repeal the patriot act and end warrentless wiretapping.......


if he flip flopped on those id be very happy.....

but no he thinks he'll give the oil companies a break......whata a joke

[steamboat]

Gimme a break ! ....What do you want---go back to $4 a gallon again. Because if you had taxed the oil companies more, all they'd do is make us pay more, inorder to compensate for the higher tax.....Don't you understand they have Obama and us over the barrel (no pun intended)?

[strict3]

it is impossible for oil to jumo from 30 dollars to 150 dollars without a conspiracy to do so....and dropping the price down to 50 dollars is ki lling russia venezuela and the iranians.....hmmm see the pattern.....anyone who doesnt agree with ther us will be invaded or starved and invaded..lol.....oil will be 150 + within a year......save this post....

and google lindsie williams...he predicted in july that it would drop to 50 bucks and they called him nuts.......he had inside info.....

check it out lindsy williams

[bobdob]

Does anyone seriously believe the oil companies wouldn't pass their losses on to consumers? We need to end our dependence on oil. The penalty to the oil companies will be that their business will die.

I am SO SICK of people WHINING about Obama "breaking his promises" before he has even taken office. It's January 20th, folks. That's the day Obama becomes president. Until then, nothing he says really matters.

[strict3]

"nothing he says really matters" exactly

[Sumocat]

Could we have some perspective on this? Big Oil's windfall profits came when supply was tight, prices were high, and Bush was in control. That's not the case now. Windfall profits next year are unlikely. Therefore, a tax on windfall profits drops in priority.

Really, it should never have been a high priority since a tax on profits is easily avoided by spending money. If ExxonMobil wants to dodge a windfall tax, all they have to do is increase their executive pay (salaries are expenditures) and spend money on outside services, no doubt provided by companies owned by major stockholders. Granted, distributing billions of dollar to outside companies helps the economy, but the benefits would be weighted heavily toward the people at the top. Possibly still a good idea, but hardly a priority. Keep it on the back burner and focus on the more important policies, like rescinding oil subsidies, first.

[peacekitten]

should the saudi king follow through on his threat, windfall profits next year are highly likely.