An “excess profits” tax on oil companies — which liberal Congressional leaders support — may well harm you by taking money out of your retirement fund, not just by discouraging oil production and exploration. Your pension fund is probably invested partly in oil companies or oil-related commodities. As the Washington Post reports today:
“Soaring fuel prices that are burning a hole in the wallets of consumers are not only benefiting oil companies . . . They are also lighting up the investment returns of pensions funds, which millions of ordinary Americans are counting on for their retirement. California’s public employees’ pension fund, the world’s largest, made its first investment of $1.1 billion into oil and other commodities early last year, and since then, Calpers has seen it soar 68 percent. Fairfax County pension managers have enjoyed a 61 percent return from a similar move over the past 12 months, far outpacing any other segment of the fund’s portfolio.”
I’m not a public employee, but I’m in the same boat when it comes to oil. My own 401(k), IRA, and 403(b) retirement accounts contain mutual funds that own stock in Exxon Mobil and other oil companies. An excess profits tax might enrich the government, but it will make it harder for me to ever retire.