Scott A. Hodge and Jonathan Williams argue against a windfall profits tax using the following “logic”:
Today, Americans pay an average of 45.9 cents in taxes per gallon of gas. The federal gas tax is 18.4 cents per gallon while the average state and local tax is 27.5 cents. These taxes pumped more than $54 billion into federal and state coffers last year alone. Diesel taxes totaled $9 billion more. Almost all gas taxes are levied at a flat rate per gallon, regardless of whether a gallon of gas costs $1.49, $2.49, or $3.49. So while industry profits go through booms and busts, government profits grow steadily larger.
If one takes a look at their graph of fuel tax in real terms – it appears that we have not seen much of an increase in real tax revenues over the past 12 years even as real GDP has increased by approximately 20%. If one takes a look at the yellow line in the second graph of this post, one might realize why – it turns out that we were paying around 50 cents in taxes per gallon of gas back in 1999 and now we are paying less – in real terms.