A windfall tax would be both effective and fair
FairnessfoundationFeb 02, 2023
On Wednesday, French oil giant TotalEnergies announced a record adjusted net profit of $36.2B in 2022, double the previous year's figures.
TotalEnergies reported an adjusted net income of $7.6B for Q4, including an impairment charge of $4.1B related to its stake in Russian gas firm Novatek. This was in line with expectations, up from $6.8B a year earlier and $9.9B in Q3 of 2022.
Oil giants have gained excess profits due to the war in Ukraine and the rapid rise of energy prices. A more serious and fair windfall tax on energy companies' profits, which would redress the imbalance between companies' contributions to the state and their earnings, would help struggling families pay their rapidly rising utility bills. Individuals are obligated to contribute to society through taxes and other forms of support, and companies must do so too.
Windfall taxes weren't a good idea in the first place, and increasing them will have serious repercussions. While they may seem like an obvious solution to nations' growing hole in public finances, in reality, it's a short-term crutch that will lead to a new set of problems down the road. They discourage domestic investment and send the dangerous message to businesses that success must be accompanied by a heavy price.