A windfall tax would be both effective and fair
FairnessfoundationFeb 02, 2023
On Thursday, oil and gas giant Shell reported record annual profits of $39.9B for 2022 after energy prices surged following Russia's invasion of Ukraine. The company's profits were double those from the previous year and its highest in 115 years.
Shell reported a profit of $9.8B in Q4, with over 40% of the company's full-year earnings coming from its integrated gas operations, which include liquified natural gas trading.
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 would redress the imbalance between companies' contributions to the state and their earnings and help struggling families pay their rapidly increasing 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 it may seem like an obvious solution to the UK's 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: It discourages domestic investment and sends the dangerous message to businesses that success must be accompanied by a heavy price.