Study authors Dr. Robert Shapiro, chairman of Sonecon and former Undersecretary of Commerce under President Bill Clinton, and Dr. Nam Pham, economic consultant to NDP Group and former Chief Economist of the Asia Region for Standard & Poor’s, examined Senate Bill 1631, the Windfall Profits Rebate Act of 2005, over a five year period. According to a news release on the study, the data shows that a substantial share of the cost of a Windfall Profits Tax would be borne by retirees and those saving for retirement.
According to the release, 41% of oil company stocks are currently held in various forms of pension plans and retirement accounts. The study found that the tax will cost pension and retirement savings holdings an average of $8.7 billion to $50 billion per year in lost gains and dividends depending on the price of oil. Individual accounts could lose as much as $287 per year. Pension accounts for public state and local employees could lose as much as $886 per year.
In addition, the study found that the tax would not generate the revenue expected by Congress anyway since payments would be deductible under the corporate income tax. The study authors also say the tax would discourage domestic oil production causing the US to be even more dependent on foreign sources.