Mrs. Clinton has been calling for increases in taxes on oil companies so that there would be additional funds available for pursuing alternative fuels.  I don't agree with this approach. 

Taxation is exercised for one of two reasons.  First, taxes are imposed to raise revenues.  Second, taxes are imposed to regulate behavior.  It is the second rationale, the regulation of behavior, that has me the most concerned.  Taxation would interfere with the business judgment rule.  The business judgment rule is usually tossed around by lawyers and judges, so Mrs. Clinton should be very familiar with it.  Firms, in general, are allowed to exercise business judgment without undue interference from the government.  If a firm wants to invest some of its profits in tiddly winks, that is it's perogative, as long as the investment maximizes shareholder wealth.  Bottomline, the decision to reinvest should be left up to the oil company.

As with all taxes, such a tax increase will lead to inefficiencies in production.  In other words, oil companies will not be using their resources to the maximum to produce oil because of the additional expenses a tax creates.  Instead, oil companies will reduce output, layoff workers, take plant offline, and pass on the increased tax expenses to the consumer.  The consumer, before realizing any benefits from alternative fuels, which by the way will cost more, will experience increased costs of using the only currently available fuel source.

Senator Obama is correct on this point.  All this talk about gas taxes is just a gimmick.  Save $28 this year and lose the ability to drive the next.  There is only one way to bring down the cost of energy.  Reduce the cost by increasing supply of current sources.