Windfall Profits Tax

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Windfall Profits Tax

A tax on profits seen as excessive. For example, a windfall profits tax may be imposed on oil companies when their profits rise above a certain amount. The idea behind a windfall profits tax is to encourage the taxed persons or companies to lower their prices, which is thought to be good for consumers. However, it may have the effect of reducing investment because the aftertax profit may not be worth the effort. See also: Windfall shares, Windfall tax.
References in periodicals archive ?
Opponents of Windfall taxes argue that such taxes are not necessary and are rather punitive because if a company profits are high, its tax bill will be high too.
It remains to be seen what effect the proposed Windfall taxes will have on future investment in the mining industry which contributed 10% to the country's GDP in 2009.
Downing Street under pressure to impose windfall taxes on power firms
I WONDER if all the loose talk about windfall taxes over the last few weeks put a spanner in the works of the EDF bid for British Energy.
The head of employers organisation the CBI has warned the Government not to jeopardise economic stability in its pre-election budget ( and not to hit business with windfall taxes after it.
Sir Digby also highlighted the potential economic damage of retrospective taxation in the form of windfall taxes and the emergence of so called "voluntary funding".
The centrepiece of Mr Brown's Budget is the welfare-to-work plans financed by privatised utility windfall taxes.
I think windfall taxes are a very, very silly and dangerous idea because they would be just like putting up a big sign that said `mobile investment and foreign companies: don't put down roots in this country, we don't want you here, go somewhere else'.
And if you start imposing windfall taxes, where do you stop?
Finally, the CBI boss calls into question the idea that windfall taxes hurt nobody except a few fat cats.