A bunch of labour MPs (apparently over 80 of them) are calling on Gordon Brown to impose a windfall tax on energy companies.
Attacking "obscene profits" and other such left wing favourites, they are arguing that the government should retroactively decided to take another bite of the already taxed profits of the energy companies and use the money raised to subsidise those they consider worthy. In typical moonbat fashion however they fail to consider the implications of their proposal.
The money to pay the tax has to come from somewhere, and that is either from increased charges to the customers, eliminating the benefit of the handouts, or from a reduced return to shareholders.
The latter might not seem so bad, until one considers that the biggest shareholders in privatised utilities tend to be pensions funds, and thus any reduction in shareholder returns adds yet another blow to pensions to those they have already suffered over the past ten years.
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11 hours ago
3 comments:
The problems with the "obscene profits", as they put it, is that they come at a time when prices go up alomst everytime you look at them. When prices go up as much as they have, and these companies continue to make huge profits it is very easy to see why people dont take the line their bills are only going up to cover wholesale increases in price.
If the windfall does go ahead then the money needs to be spent in an area to reduce prices over time. One way of doing this would be to increase our storage areas for gas and oil - therefore buying and storing when cheaper - and not the present system of being at the mercy of prices on the day.
Price increases are regulated though, so if it is felt that they are excessive, then the regulator should be taken to task.
There is also a major issue with retroactive taxes. A free society requires that the tax rates be set in advance so that people can act accordingly. It is grossly unfair for the government to say that you've paid your taxes but we want a bit more just because you happen to be unpopular.
If the government want more money from the companies for capacity et c. then increase the tax rates (but be prepared for the consequences.)
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