Professor Elam

Tuesday May 4 2010

Australia now has the distinction of imposing the highest taxes in the world on miners. Australia is a commodity producing country. It is typical of politicians to seize the golden goose and kill it. This is justified as paying for pensions and health care. However of course, the miners are liable to move elsewhere so that they can keep more of their findings. Remember, well you probably don't, but Jimmy Carter had the same great idea with the Windfall Profits Tax in 1980. The result is that intl oil companies now employ a fraction of the people they used to employ in this country. And the tax of course never brought in what was estimated. Another reason is that such taxes are late in the day events, they occur near the top of commodity booms. Carter's tax was imposed one year before oil prices peaked. 

Now one can expect, on the heels of the leak in the Gulf, harsh taxes to be imposed, can you hear it, for the environmental damage that oil companies cause. Never mind the damage caused by those who insisted we do not drill on land in ANWAR or in shallow waters, instead drilling has been forced to deeper less safe waters. But this is all part of the pattern repeating the 1968-82 experience. 

Offshore drilling will now, well what is left of it, evaporate in the US making us  even more dependent on foreign sources.