In the comments thread a few posts down, we’ve been having a discussion about whether there’s a legitimate (that is, policy-based, as opposed to politically based) argument for a windfall profits tax on oil companies. I’m dubious, because the proposal seems to be based more on the current unpopularity of the oil industry than anything else.
But I also know what I don’t know, so I emailed Justin Fox–someone who is a lot more sophisticated than I am about these economic questions–and asked him to give it some thought. It turns out Justin doesn’t think it’s a great idea, but he doesn’t think it’s a terrible one either. Here’s how he argues it.