Bryan Caplan on the McCain/Clinton gas tax relief plan

You’ll find his contrarian take in The New York Times this morning.  It’s a second best, public choice argument: according to Bryan we are usually too nasty to energy companies in bad times, so sending them some excess profits is a bit of needed TLC.  McCain’s plan of course is better in his eyes because it doesn’t include the punitive windfall profits tax.  And without a gas tax holiday we might be tempted to do something worse.  Excerpt:

…even a “giveaway” to the oil industry sets a positive course for the
future. During the last crisis, the industry was a scapegoat for
scarcity. Politicians scrambled to stop oil companies from profiting
from the crisis, even though temporarily high profits end shortages by
giving businesses an incentive to figure out how to increase output.

Stephen Colbert dissents.  And here’s Bryan’s own summary of Bryan.  I don’t know the data on the average rate of tax paid by energy companies, compared to other endeavors, but looking at that would be one place to start.


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