Windfall Tax

See: Windfall Profits.

To a firm, a windfall tax is rain on their parade of profits. A semi-Socialist government might levy a windfall tax against certain industries when everyone else is roughing it, and that industry is making extra profits. For instance, if there’s some kind of recession and the economy is rough—except for, say oil and coal, which are making bank—the government might slap a windfall tax on the oil and coal industries.

It’s not that they’re trying to punish those industries. It’s just that, because most people (and firms) are having a tough time, so is the government piggy bank. They want to use the windfall tax to boost social programs to try to help dampen the bad economic climate everyone is in. Still, there are anti-windfall tax groups (definitely the firms that are taxed) that say windfall taxes makes them not want to make more profits, and that if they’d gotten to keep their money, they’d reinvest it and be innovative magicians, which would also do good for the economy.

Who’s to say, Comrades?