Why Oh Why Can't We Have Better Think Tank References?

CNN tonight cited the Tax Foundation as a "non-partisan" source of analysis on Obama's windfall oil tax proposal. It would have been nice if CNN had noticed that of the Tax Foundation's five directors, two are oil company executives: Koch Industries' Wayne Gable and Exxon Mobil's Joe Luby, Jr.

CNN said the Tax Foundation showed that a similar tax in the 1980s raised much less revenue than initially expected, which they interpret to indicate that Obama is exaggerating how much money would be raised from the tax. But as this truly non-partisan Congressional Research Service study shows, the revenue shortfall was due almost entirely to the fall in the price of oil, since the tax was calculated based on the difference between the market price and a 1979 base price. As the study says, "Large overestimates of projected revenues occurred in the original forecast of revenues made in 1979 and 1980, reflecting overestimates of crude oil prices."

I think Obama would readily agree that his windfall oil profits tax should be designed so as to produce reduced revenue if, against all expectations, the price of oil falls dramatically and thus those windfall profits evaporate. As they say, that's a feature, not a bug.