Premium
The Windfall Tax
Author(s) -
CHENNELLS LUCY
Publication year - 1997
Publication title -
fiscal studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.63
H-Index - 40
eISSN - 1475-5890
pISSN - 0143-5671
DOI - 10.1111/j.1475-5890.1997.tb00264.x
Subject(s) - windfall gain , economics , ad valorem tax , tax reform , indirect tax , scope (computer science) , value added tax , tax basis , tax credit , public economics , microeconomics , monetary economics , state income tax , macroeconomics , gross income , computer science , programming language
This paper analyses the windfall tax on the privatised utilities, introduced in the 1997 Budget. It describes the main arguments put forward for the tax and sets out the details of its scope, scale and method of implementation. The tax is examined against the guidelines of economic efficiency, fairness and administrative feasibility. A one‐off tax based on past profits should be efficient, provided that the statement that it is one‐off is credible. However, as a tax levied on companies, it does not directly tax the windfall gains that were made in the past by shareholders in the companies concerned. JEL classification : H25, L51, L98.