A windfall tax would be both effective and fair
FairnessfoundationFeb 02, 2023
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TotalEnergies Reports Record Profit in 2022
Last updated Feb 09, 2023
Image credit: Reuters [via Euronews]Facts
- On Wednesday, French oil giant TotalEnergies announced a record adjusted net profit of $36.2B in 2022, double the previous year's figures.[1]
- 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.[2]
- TotalEnergies’ record result is partly attributed to its strong presence in the liquified natural gas market as European nations sought supplies from further afield amid the war in Ukraine.[3]
- The new report follows similar ones from BP (British Petroleum), Shell, Exxon Mobil, and Chevron, prompting calls for further taxes on the oil industry as households struggle to pay their energy bills.[4]
- TotalEnergies' profits came as it had already booked a $1.7B provision for windfall taxes levied by the EU and UK in the fourth quarter. Regarding the coming year, the company predicted net investments of $16B –18B, including $5B for low-carbon energy.[4]
Spin
Left narrative
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.
Right narrative
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.
