Taxing oil profits: Proceed with caution

Politicians are dying to get at more of Big Oil’s billions, but analysts are torn about what that will do to prices or future energy sources.

NEW YORK (CNNMoney.com) — Politicians are eyeing oil profits like a fat juicy glazed ham.

With all the money Big Oil is making – the top five publicly traded firms pocketed over $120 billion in 2007 alone – and with an election on the horizon, it’s easy to see why.

The leading Democratic presidential candidates want a windfall profits tax to do various things, and although their plans differ slightly they generally want to use the money to give Americans a break from skyrocketing energy prices and jumpstart research into renewable energy.

House Democrats have also warned of punitive measures if these massive profits continue at the expense of American consumers.

But while the politicians present their plans, analysts are far less sanguine about whether or not a windfall profits tax would actually help soothe steadily rising energy prices and spur R&D for alternative energy sources.

CNN