Sonia Furstenau and other provincial green party leaders across the country are calling for a windfall profit tax on oil and gas companies:
...While people across the country are facing impossible decisions (do they buy groceries or pay rent?) oil and gas companies have been raking in record-breaking profits — $8 billion in the first quarter of 2022 alone.
The roots of this financial crisis are complex, but one thing is crystal clear: corporations should not be profiting off the suffering and sacrifices of the public.
That’s why the BC Greens, the New Brunswick Greens and the PEI Greens are calling on Prime Minister Justin Trudeau to implement a windfall profits tax on the oil and gas sector...
As David Moscrop notes in Jacobin, the federal NDP has been calling for a more broadly based windfall profit tax for some time:
...In the fall of 2020, the party reminded the country that “Canada’s top twenty richest people are close to $40 billion richer than they were before the pandemic hit.” Since then, things have only gotten worse. At the time, NDP leader Jagmeet Singh proposed a 1 percent tax on families “with fortunes over $20 million” alongside higher taxes for web giants and “a temporary COVID-19 Excess Profit Tax.” The rate of this tax would have been hefty: double, at least, what the Liberals levied in their partial measure...
So.
What's the point of such an initiative?
Back to Mr. Moscrop...
...The goal of an excess profit tax is to combat profiteering during a crisis. Such a tax can serve to help limit inflation by keeping prices unrelated to supply chain issues down....
But has it been done before and does it actually work or will it wreck the economy?
Well...
It turns out it has been used before, by both the U.S. and Canada during the World Wars of the 20th century:
...Both countries imposed temporary excess profit taxes during the First and Second World Wars.
Allison Christians, the H. Heward Stikeman Chair in Tax Law at Montreal’s McGill University, who has researched excess profit taxes, said such a temporary tax would make “great sense” in the current environment...
{snip}
...“It’s not a punishment of their success. Rather, it’s an acknowledgement that the brokenness of the market has created a windfall for them,” she said in an interview. “And if the government takes some of that, especially now to pay for things that we now really are struggling to pay for, for example, health care, then that’s good over all for the economy.”
Prof. Christians said her review of Canada’s excess profit tax during the Second World War left her with the impression that it raised some revenue, but not a lot, and that it didn’t harm the economy...
And did anyone do an analysis of how much revenue the NDP's proposed tax would raise?
The answer, of course, is yes:
...A new 15 per cent tax on companies that made “excess profits” during the COVID-19 pandemic would net nearly $8 billion to the government’s coffers, according to the Parliamentary Budget Officer...
Gosh.
Doesn't sound so crazy to me.
.
1 comment:
and this here suggestion of combat profiteering during a crisis' would include pharmaceutical companies producing vaccines with 'best before dates' so that they get to sell more????
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