The shortfall from projected revenues in that picture had a lot to do with missed projections on energy prices.
But did the tax on U.S. providers of oil cause Russian and OPEC to start supplying more oil? Spencer in a couple of good comments fires back at the CBO study, which showed the difference between projected revenues and actual revenues:
Technically, the windfall profits tax was signed into law in April 1980 and remained on the books until 1988. But the tax only collected revenues when the price of crude was above $30 and April 1983 was the last month oil was above $30. So for all practical purposes the effective end of the tax was April 1983 – because no one had to pay the tax after that point.
Williams and Hodge of the Tax Foundation make the following claim:
The answer to the second question, according to the Congressional Research Service (CRS), is that the 1980s windfall profits tax depressed the domestic production and extraction industry and furthered our dependence on foreign sources of oil … CRS also found the windfall profits tax had the effect of decreasing domestic production by 3 percent to 6 percent
Spencer has challenged their claim but even if it is true, a 3% reduction in domestic quantity supplied is not the primary cause of the forecast error.
Incidentally, I hope I was clear that I’m opposed to price controls and do not buy into this price gouging spin. Spencer does not buy into the spin either. I’m not sure why David associated my advocacy for a gasoline tax with the gouging spinmeisters.