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A windfall profits tax, or excess profits tax, is a one-time surtax levied on companies or industries that experience unexpectedly high profits due to unforeseen circumstances, like a surge in energy prices, weather related or disease related events.

A windfall profits tax is a tax on profits that are not usually captured, often motivated by the desire to tax profits resulting from an external factor, such as an energy crisis.

Purpose:
Governments propose such taxes to generate additional revenue, potentially encourage companies to reduce prices, or temporarily regulate markets during periods of unusual volatility.

Examples:
Historically, these taxes have targeted oil and energy companies when costs have risen, especially during war or other crises.

US Context:
In the US, there have been discussions and proposals for windfall taxes on oil and gas companies, particularly in the wake of record profits and high energy prices.

European Union:
The European Union has agreed to impose an EU-wide windfall profits tax on fossil fuel companies to fund relief for households and businesses facing high energy prices.

UK:
The UK government introduced a windfall tax, called the Energy Profits Levy, on the "extraordinary" earnings of firms to help fund its scheme to lower gas and electricity bills.

Criticisms:
Some argue that windfall taxes can discourage investment and potentially lead to unintended consequences, while others argue that they are necessary to address unfair profits and ensure a fairer distribution of wealth.

Examples of Windfall Profits:
A company making high profits by selling drinking water to the public after a hurricane.

Energy companies profiting from a major oil shortage in another country.

Companies profiting from a surge in demand after lifting Covid restrictions.

Trump Treasury Secy Scott Bessent dismissed concerns from Dems saying that exporters from China would lower their prices due to higher US tariffs adding any tariffs should be phased in so that any “price adjustment” could be absorbed gradually.

Economists forecast roughly $1,300 increase for households on average as US factories rely on inputs from Mexico & Canada.

The auto & electric equipment sectors in Mexico are most exposed to disruption & mineral processing in Canada. The largest risks to USA would be to farming, fishing, metals and auto sectors.

Trump has stated the ability of tariffs to protect domestic manufacturers. But on balance, most economists expect fresh trade barriers to raise prices for US businesses and households, which will lead to a temporary burst of higher inflation. How temporary depends on Americans’ expectations about future increases in inflation

"We don’t need what they have,” Trump said. He added that "tariff rates could increase over time" and suggested that the "tariffs might not apply to oil imports", a decision that could avoid an all but certain spike in gas prices.

While the US is the world’s largest oil producer, Canada refines the lighter US crude with heavier oil from places like Canada to make fuels like gasoline & diesel which is then re-inported. Roughly 60% of the oil that the United States imports comes from Canada, & about 7% comes from Mexico. As such, that total is 35% of the US daily consumption.

If Canadian refineries respond to the tariffs by cutting production, gas prices in the Midwest could climb 15 to 20¢ a gallon & smaller increases outside the region.

At the northern border, the flow illegal migrants skyrocketed in 2024. During that time, more than 23,000 arrests were made of migrants crossing illegally — 2 years before it was around 2,000.

Hope it's all worth it MAGA!

I'm not sure if Americans know the truth about agri-business.

Ethanol manufacturers use about 40 percent of the U. S. corn crop for ethanol and related co-products, with the majority of the ethanol being consumed in the domestic transportation fuel market.

Since the creation of the domestic market for corn ethanol after the energy crisis of the 1970s, the federal government has given away a steady stream of subsidies. Originally sold as a way to achieve energy independence and reduce greenhouse gas (GHG) emissions, ethanol has been a favorite of policymakers from the Corn Belt. Ethanol producers have received favorable treatment under the tax code, tariff protection from foreign competition, a government mandate for its use, infrastructure subsidies, and more.

As a result, taxpayers have spent tens of billions of dollars over the last 40 years subsidizing the mature biofuel. Decades of subsidies have failed, however, to reduce climate risks and serve as a bridge to next-generation, non-food-based biofuels, while spurring several unintended consequences, wasting taxpayer dollars, and distorting markets.

As concerns, food, American farm subsidies have negative environmental effects. By encouraging the overproduction of certain crops, subsidies can lead to the use of more pesticides and fertilizers. Additionally, heavily subsidized corn is used to produce unhealthy processed foods which are cheaper and less nutritious which has a multiplier effect that further contribute to the obesity epidemic.

Another way in which corn subsidies raise prices is by setting minimum prices for certain crops. The government often sets a minimum price for corn that is higher than what would be considered the market price.

In effect USA Americans are subsidizing corn conglomerates AND raising the prices of corn derived products - hitting themselves in the wallet twice so huge agri-business conglomerates can rake in yet more profits.

🌽 is also a substitute for porn (duh)!