Karl Rove discusses Obama’s windfall profits tax rhetoric today. He makes good points about how this tax is inefficient in targeting either profit margins or total profits, in both of which oil companies lag several other industries. It’s even suboptimal for sending a message that Americans will punish industries causing societal unrest. Financials (re: mortgage crisis), where there’s concrete evidence of fraud, would be more apropos targets.
If there’s been collusion by American oil companies fraudulently raising prices - penalize them. If oil companies dodge corporate taxes via loopholes - close them. Identify negative externalities of oil production and propose ways to offset them with targeted surtaxes - and do the same for other polluters. But don’t arbitrarily tax an unpopular industry in isolation, just because it’s profits are growing or because voters are frustrated - that’s contrary to our principles.