. Of course, you might think that the success of some of our largest companies might be a matter of celebration, or at least of quiet pride. But sadly, the UK is not that kind of country any more. Instead, there is just a constant demand to pay more and more tax. We have not yet quite got to the stage of extra taxes on the supermarket chains, the utilities, or the internet giants, just in case inflation, or squeezed real wages, mean they end up making a little more money than usual. But it is probably only a matter of time. Almost anything can be the target of windfall tax right now it seems. In reality, this is no way to run a prosperous free market economy. There are many industries that go in cycles. Oil, gas, and any form of commodity is one of them. When there is too much of the st){kind=link}
This is no way to run a prosperous free market economy
Shell has made bumper profits from the soaring price of oil and gas. Barclays is raking in a ton of cash from rising interest rates and Lloyds won’t be far behind. Inevitably, there are already calls for windfall taxes to be imposed on them. After all, if people are profiting from the cost-of-living crisis, surely it is only fair that they should pay a little extra to help out the rest of society.
And, heck, why stop there? Surely very soon we should be taxing Aldi and Lidl from the profits they are making as we all trade down on our weekly shop, on John Lewis on everything they make from booming sales of hot water bottles to get through a cold winter, and, come to think of it, on Greggs as well now that a couple of sausage rolls are the only meal out anyone can still afford.
At the rate we are going, any form of excess profits could soon be in the Treasury’s sights.
But this is crazy. In reality, many industries go through a cycle. There are bad years for profits and good years, and the task of the managers is to ride through that and keep investing for the long-term. If we confiscate any money they make when times are good, we will simply destroy any incentive to build the business.