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Sharing the boom : Comments
By Andrew Leigh, published 2/7/2008Should the Rudd Government take a leaf from the Tony Blair playbook and consider a windfall profits tax on Australian mining companies?
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For years Cochlear dumped millions into their research and finally introduced the implant. Their first annual profit was certainly much higher than their previous years losses so it is obviously a windfall - do we tax it at a higher than normal corporate rate?
When profits are highly taxed stockholders dividends are reduced which also drives a reduction in the value of the shares which then reduces the value of superannuation funds who have purchased those shares. This is ultimately a tax on everyone.
At what point does a profit become a windfall? When a certain percentage gain is passed? Like a doubling of corporate profits - how about from $100 to $200? That is a doubling.
How about lottery winnings they are certainly a windfall, as are winnings at the race track or on the scratchies or playing the pokies or the Saturday night card game at the neighbors house?
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