Windfall Profits Tax

With all the talk of implementing a windfall profits tax on oil companies, what are the primary negative effects this will have on gas prices?

The only thing I can come up with is that it will lower new investment in oil so in the long run may curtail supply.

Anything else?

You basically hit the nail on the head.  It will also discourage competition.  Why would a competitor enter this market knowing before hand the extreme amount of taxation that he/she will incur?  This will also lead to gas shortages, so basically we will have the 1970's all over again.  Price caps, gas shortages, gas lines, and new investing or competition will be discouraged into entering the market.  All of this will of course raise the price of gas in the long run.  Also the government will have more money to throw around and that equates to wasting more money and flushing it down the toilet.  Not the mention the immoral nature of invading the market and basically stealing money from regular businesmen and your average investor.

Another thing to consider is the sheer amount of retirement investments in the energy industry.  These are currently popular picks in 401 k's, and for good reason too.  As previously mentioned, a windfall tax would not necessarily have an instantaneous effect, but would ultimately drive down the overall market capitalization of these stocks thereby hurting many middle class Americans who are heavily invested.

I wonder what Obama is going to do?

 Taxes also raise the cost of doing business so there is a chance that it might be passed on to the consumer. For instance gas prices did rise pretty quickly when the United States Congress eliminated the oil companies loopholes. I am not certain if the loophole reductions did this but I bet there is some connection. A windfall profit tax, which is pretty much a tax that targets the oil companies will do everything people have mentioned above and raise the overhead cost of the business.

Goldenboy219:

I wonder what Obama is going to do?

 That question keeps me up at night. 

Goldenboy219:

I wonder what Obama is going to do?

He's not going to get re-elected, that's what. Jimmy Carter II, anyone?