'Windfall' still taxing
HERE WE GO AGAIN – part two. You may remember that a couple of years ago the ignorant and greedy were calling for a “windfall tax” to be levied on, specifically, Sasol for daring to make big profits out of the high oil price. Fortunately, that threat was beaten off. But those who believe that only SA is capable of such folly should note the idea has now surfaced in both Britain and the United States.
So far it looks as if in Britain the idea, floated by elements of the Labour government, has been shot down, not least by the argument that if you tax windfall profits you must compensate companies that suffer windfall losses. No government would dare to advocate that, though it seems to have escaped notice that the Northern Rock bailout was really just that.
The difference is that Northern Rock’s foolish lenders and borrowers are not faceless financial institutions but voters in numbers no government – least of all this crumbling band of Brown – could risk alienating.
It’s also been pointed out that taxing oil companies more heavily will only spur them to step up their frenzied efforts to backtrack on promises to invest in alternative and renewable energy.
Be that as it may, contagion has now spread to the US, where the otherwise sensible Barack Obama has pledged to impose a windfall tax on oil company profits to be passed on as a US$1 000 per family tax rebate. It’s almost enough to make one vote Republican. I repeat, though, only “almost” enough.