There is a lot of talk about taxing oil companies a windfall tax because of how much money they have made recently.
How does this affect the price of fuel in a positive way (i.e. make it go down in price)
Surely an oil company that gets a sudden tax bill is going to put the price of fuel up to offset what they are paying in tax?
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The theory is that it will force Oil Companies to reduce their profits in order to avoid paying the tax.
But does that mean lowering the price of gas? Not necessarily
Instead they could invest it internally on RnD or buy property and companies instead to raise their share price.
Such talk of a windfall tax is probably better thought of as a scare tactic to tell the Oil execs to smarten up because they are hurting consumers and the economy for their own personal benefit, and if necessary the government will step in to hurt them.
Oil is such a critical part of our day to day lives it’s kinda surprising there’s been no push to nationalize oil companies. Most 3rd world countries did that, basically the government seizing and/or buying their oil industry so that the profits become tax revenue for that government.
Alternately the government should just invest a ton of cash in technology and resources to reduce the demand on oil. Such as better public transport and better electric car infrastructure. That would solve the root problem and help make countries more energy independent.
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