Windfall tax oil /gas companies

wittynamegoeshere

I don't see the relevance of much of the above, honestly this debate has got so convoluted that it no longer makes much sense.

There are rights and wrongs of both sides of the argument.

But our opinions are irrelevant anyway, as we're not the people who decide.

The head of the UN says tax them.  Truss says she won't, although she said this several hours ago so she may have changed her mind by now.  I don't know what Sunak says.  They will decide, and either way there will be winners and losers.  It's likely that if they were taxed then the losers would be wealthier, and if they weren't the losers would be poorer.  One may be preferable to the other depending on your opinion, PR career or shareholdings!

I have no axe to grind either way.  But sadly many people don't care about much beyond their own personal financial situation.  If they make money from it then it's good, if not then it's bad, to heck with everyone else.

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MattMattMattUK said:

wittynamegoeshere said:

Looks like the energy company PR departments are busy posting here as usual.

Just because someone thinks you are wrong does not mean that they work for whoever you are irrationally criticising.

wittynamegoeshere said:

The energy industry is making ridiculous profits at the moment.  They are not going to have a tantrum and shut down if their profits are reduced from £stupid amounts to just £lots.

They are making large, short term profits, however they made losses or minimal profits in 2020 (when they actually had to pay people to take oil off their hands) and they have had to take losses in the tens of billions range as a cost of exiting Russia. The cost of exiting Russia has wiped out all profit for both BP and Shell from their entire global operations so far this year, the figures in the headlines are only part of the story.

wittynamegoeshere said:

They must know they're making excessive profits, 

Define "excessive profits" and who gets to decide? They are selling a global product in a global market place at a global global price. 

wittynamegoeshere said:

largely as a result of war and suffering,

Their profits are currently the result of several factors, the Russian invasion of Ukraine, the global economy coming out of Covid lockdowns, the West transitioning away from coal (and to an extent oil) as well as China's push for gas. 

wittynamegoeshere said:

so will not be at all surprised if they are asked to give back just some of the money they've taken from the people. 

They have not "taken" money from anyone, they have sold a product globally and made a profit it doing so. They already pay Corporation Tax at 30% vs the 19% most companies pay, they are also being charged an additional 25% this year as well.

wittynamegoeshere said:

They will still be left with plenty, they won't starve.

Oh look, a straw man. It is not about starving or not, excessive taxes discourage global investment. We should be pushing to build more nuclear and renewable power, to minimise the impact of a fluctuating global energy market, not imposing silly taxes on global companies because some people do not understand economics. 

wittynamegoeshere said:

However, this government may or may not, possibly depending on what size of "donations" their party has received from this industry.

The government is already imposing an additional 25% tax on oil companies profits, bring their tax rete to the highest rate of any advanced economy.

I have no love for this government, I think fossil fuels need to be phased out, but taxing global companies at a punitive rate because they happen to be domiciled in the UK is not going to benefit us in the medium or long term, even if it does lead to a short term gain.

The oil companies weren't paying people to take oil off them, that was the speculators who were rapidly facing delivery day for their oil without any actual way of taking delivery of said oil and no-one to sell it to. They also didn't "pay people to take the oil off their hands", they just sold it at a loss.

Section62

ab1234567890abcdefgh said:

The oil companies weren't paying people to take oil off them, that was the speculators who were rapidly facing delivery day for their oil without any actual way of taking delivery of said oil and no-one to sell it to. They also didn't "pay people to take the oil off their hands", they just sold it at a loss.

Oil prices went negative.  Which means the seller has to pay the buyer to take it.

That fact was widely reported at the time -

https://www.bbc.co.uk/news/business-52350082

MattMattMattUK

wittynamegoeshere said:

I don't see the relevance of much of the above, honestly this debate has got so convoluted that it no longer makes much sense.

I am replying to the points you raised, if you feel that they are not relevant then why did you bring them up?

wittynamegoeshere said:

There are rights and wrongs of both sides of the argument.

There are not really rights and wrongs, there are facts, figures and economic reality on one side, and emotions on the other.

wittynamegoeshere said:

But our opinions are irrelevant anyway, as we're not the people who decide.

There are lots of things that people do not get to directly decide, that dose not mean that they are a point for discussion. We also all decide them indirectly by the MP's we vote for.

wittynamegoeshere said:

The head of the UN says tax them.  

He does, but he does not need to deal with the economic realities of damage to long term investment, indeed the UN is mostly just a talking shop. He feels that they should be taxed based on an "immoral" level of profit, but when asked would not explain where the divide between moral and immoral profit is, nor why he thought that energy companies making higher profits this year, after losses in previous year should be taxed at a punitive rate, but companies such as Apple who make large every year, at very high margins, should not be taxed more. His position is inconsistent and emotional, not consistent and rational.

wittynamegoeshere said:

Truss says she won't, although she said this several hours ago so she may have changed her mind by now.

Probably one of the few things Truss has right, although her general economic policy is woeful at best. Her current proposals will increase inflation and make the incoming recession deeper and longer, she will probably counter that by banging on about cheese and riding around in a tank.

wittynamegoeshere said:

I don't know what Sunak says.

Under Sunak they were/are already taxed at 30% which is higher than standard corporation tax at 19%, he also introduced the 25% surcharge on their tax rates for this year. He said that would be a one off and there are exemptions for that higher rate of tax if they invest money in renewable energy production in the UK. Of course the tax does rely on them making a net profit, which they are unlikely to do with a combination of the £20 billion or more cost of exiting Russia and share buybacks.

wittynamegoeshere said:

They will decide, and either way there will be winners and losers.  It's likely that if they were taxed then the losers would be wealthier, and if they weren't the losers would be poorer.  One may be preferable to the other depending on your opinion,

There are always winners and losers, that is life. The issue with the windfall taxes is that it targets one specific industry, a global industry, where most of the profit comes from global operations, and seeks to take that money for the UK government to distribute. That might might well have a short term benefit for the sector of the UK population who get free money nominally funded by it, but it also deters international investment at a time when the UK is already looking unattractive to international investors. That will have a detrimental impact on everyone in both the medium and long term. 

wittynamegoeshere said:

PR career or shareholdings!

This strawman needs to stop, the claims that everyone who disagrees with you either works for the company, or owns shares in the company you are criticising is an utter failure of debate.

wittynamegoeshere said:

I have no axe to grind either way.

From your posts you seem very much to be grinding your axe in favour of windfall taxes.

wittynamegoeshere said:

But sadly many people don't care about much beyond their own personal financial situation.

Many people do not care about anyone else, that is evidenced across the political spectrum. Those on the right who do not want to pay more taxes to properly fund services, those on the left who only want "someone else" to pay the taxes to fund the services and increases in their handouts. Personally I have long supported raising taxes on everyone, but in a rational way which promotes growth and boosts the economy, individuals financial circumstances and the health of society. I am prepared to pay more taxes myself so long as we all do, unfortunately I am in a minority. Even though c. 80% of the population support higher taxes, only 6% support increasing taxes that they themselves pay.

wittynamegoeshere said:

If they make money from it then it's good, if not then it's bad, to heck with everyone else.

I make money from a few things, from my business, from some investments (although none in fossil fuels), the money I make from that is shared with the nation via taxes, it is good for the nation for me to make money, because that enriches the nation. My business is also a net exporter (in value terms) so that further enriches the nation. I am prepared to pay taxes, indeed it is essential to the health of the nation that we all do, but unfortunately so many people seem to demand other people/businesses are taxed so that they can receive the benefits, that is not reasonable, nor is it sustainable.