2/2: #The Second Term plan: 2/2: #Energy: Now the Administration seeks a windfall tax on oil and gas enterprises.: 2/2: #Energy: Fraught. Richard A Epstein, @RichardAEpstein, @HooverInst, Tisch Professor of Law NYU Bedford Senior Fellow; Hoover Instituti
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John Batchelor
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🗓️ 25 June 2023
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2/2: #The Second Term plan: 2/2: #Energy: Now the Administration seeks a windfall tax on oil and gas enterprises.: 2/2: #Energy: Fraught. Richard A Epstein, @RichardAEpstein, @HooverInst, Tisch Professor of Law NYU Bedford Senior Fellow; Hoover Institution; senior lecturer, University of Chicago Law School. (Originally posted May 23, 2022)
https://www.hoover.org/research/all-wrong-moves-energy-markets
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| 0:00.0 | This is CBS Island World. I'm John Batsworth, Professor Richard Epstein of the Hoover Institution, |
| 0:09.8 | teaches law at NYU in the University of Chicago. Outlining the challenges that the U.S. and |
| 0:16.1 | our allies and the globe face with a fuel dislocations right now, the war, Russia, and |
| 0:23.4 | the ambition of Glasgow in 2021 to reduce fossil fuel and increase renewables. Richard has suggested |
| 0:31.6 | in his essay for defining ideas that there are remedies tried by those who are engaged in |
| 0:39.1 | worrying about the Green Revolution, but want to find ways to work with fossil fuel. The |
| 0:43.8 | first that comes to me, Richard in U.S.A. is that the Congress has proposed capping prices. |
| 0:50.9 | At the same time, there is a proposal to tax extraction companies, fuel, big oil, over $66. |
| 1:00.3 | Will either of those increase the supply while mitigating the domination of fossil fuel? |
| 1:06.3 | How could you possibly increase the supply of anything if you tax its production? What it will do |
| 1:14.2 | essentially is to say that if the prices start to go up, the companies cannot essentially get |
| 1:20.4 | the gains from it so they have no incentive to increase production because they're not going to be able |
| 1:25.4 | to capture the particular situation. Then the supplies will become even shorter and more scarce, |
| 1:32.2 | and so the prices will go up even further. It's the same thing, whether you call it a |
| 1:37.0 | Winfell profit tax on the one hand or a cap on prices or another, ever since George Stigler |
| 1:42.4 | did his pioneering work on regulation. What we realize is that taxes and regulations are kind of |
| 1:47.8 | compliments and substitutes for each other, so that if you want to figure out how to reduce output |
| 1:53.0 | by a given amount, you can either impose a price regulation on the one hand or a tax on the other. |
| 1:58.1 | If you know how to calibrate these things, you can get pretty much the same result either way, |
| 2:03.1 | with differences in terms of the way in which the cash gets to move. Taxation transfers wealth, |
| 2:08.6 | whereas regulation tends to make sure that the wealth is never created. So this is so foolishness |
| 2:15.0 | that's going on here. What you have to do is to have a very simple program. Don't define |
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