Boris Johnson’s government has proposed a 25 percent “windfall” tax hike on energy companies levied to fund yet another bailout program for British families struggling with record energy prices — to the tune of $19 billion. Ironically, this concept was first proposed some months ago by the Labour Party but was rejected by the Conservatives. Now, however, facing increasing political headwinds due to the Partygate scandal, the prime minister has succumbed to the temptation to “soak the rich” as a means to raise his polling numbers.
On this side of the Atlantic, a similarly self-defeating and counter-productive Biden-administration-backed windfall-tax scheme is circulating in Congress, the obvious demerits of which are offset by the politically advantageous appearance of doing something — anything — to share the record profits of “Big Oil” with the everyday Americans who are paying record prices at the pump. This legislation would put a 50 percent tax on oil sold for more than $66 per barrel. At the $120 price anticipated later this year, the “Big Oil Windfall Profits Tax” would send back a mere $240 a year to Americans making less than $75,000 per year — which is hardly sufficient to reverse the disastrous impact such prices would have on our economy. It would also certainly make the energy sector both in oil and natural gas think twice before making additional investments to increase supply.
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