Economists surveyed on oil/gas windfall tax rebates

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A majority of Ohio college and university economists surveyed recently agree a windfall tax on excess profits of large oil and gas companies would be an efficient way to provide temporary relief to households in the state from rising energy costs.
Scioto Analysis, which conducted the survey, posed the statement to 26 economists: “A windfall tax on the excess profits of large oil and gas companies – with the revenue rebated to households – would be an efficient way to provide temporary relief for the average household in Ohio from rising energy costs.”
Eleven of those surveyed agreed with the statement and four strongly agreed. Four disagreed and one strongly disagreed while five were uncertain and one had no opinion,
Kevin Egan, of the University of Toledo, agreed but commented he would “prefer all subsidies that support all fossil fuels were eliminated and anti-trust laws enforced so no one company has too much market power.”
University of Mount Union economist Michael Myler strongly agreed and said, “Let the market determine the price of goods. Reimburse the consumers so that they could buy the same amount of the high-priced good (gasoline/fuel oil/electricity) if they choose to spend their money that way. Micro theory suggests consumers will buy less of the high-priced good and spend a portion of the reimbursement on other goods.”
Bob Gitter, Ohio Wesleyan University, disagreed: “With a limited supply of crude and refinery capacity, we don’t want to help people buy more. In times of inflation, we don’t need to stimulate demand either.”
Michael Jones, of the University of Cincinnati, strongly disagreed: “The best way to combat rising energy costs is to lower the cost of energy production. A windfall tax does the opposite. A tax makes it more expensive, not less expensive, to supply energy to the market.”
Dean Snyder, Antioch College, agreed with the statement and pointed to the situation in France for comparison.
“The French energy giant, TotalEnergies, reduced prices at the pump in response to the possibility of a windfall profit tax. The real threat of a windfall tax may be an effective way to reduce consumer energy prices,” he commented.
Kathryn Wilson, of Kent State University, said she was uncertain, citing the impact a tax would have on future decisions by the energy companies.
“In terms of efficiency, the primary question would be what effect does the tax have on future decisions of oil and gas companies. If it does not change behavior, then it would be an efficient way to provide temporary relief. However, if it causes these companies to change their future behavior, then the efficiency implications are not as clear,” she commented.