'Excess Profits'

[Paigntonian]

is a ridiculous phrase. Businesses exist to make profits. If a company makes a million one year, then three million the next year, what proportion of the increase is somehow 'excessive'. The point is not what they make but how they are taxed. Many may want to see a higher corporation tax rate and many may not. And that's the political decision.

[FatticusInch]

Let’s share the wealth and ease off on the greed a little, maybe?
How much money does anyone need to be comfortable in one lifetime?
What’s the actual point of being a billionaire?
Unless you can guarantee immortality, isn’t it fruitless?

[Paigntonian]

Fatt: But that's my point. Businesses can do as well as they want, employ people, who pay taxes, and pay tax themselves. The moral problem is not 'excessive profit' but how they are taxed. The vast majority of businesses, by the way, are not run by millionaires.

[FatticusInch]

The moral problem at the moment seems to be one of not taxing eye-watering profits of big businesses as a heating and cost of living crisis looms.
It’s not difficult, but then I guess it depends on where your priorities lie…..and greed.

[Paigntonian]

Yes, Fatt. You've right. My point was that there is no such thing as 'excessive profits'. It's how things are taxed.

[perseverer]

There is a difference between excess and excessive.
Also in the current situation the big energy firms, BP, Shell and the like have been making huge profits not because of their own efforts but because of the world situation.

[Old_Geezer]

They may be there to make a profit but a) overcharging because they can leading to more than morally acceptable can reasonably be considered excessive, and b) getting lucky with circumstances that enrich the company despite no effort on their part to deserve it, while causing hardship to the population, can also reasonably be considered excessive. It's all about morals & morality.

[Untitled]

the profit increases are not the result of any value added or extra work by the energy companies… it is price gouging.

[Untitled]

i do agree though that private companies exist to create value for shareholders and nothing else and so cannot really be blamed for trying… the issue is that such a basic commodity that everyone needs to live was entrusted to private companies in the first place when they are not suitable custodians for such a vital industry… That situation should be reversed!

[davebro]

The profits don't just disappear into a black hole. They are re-invested in the business or distributed as dividends to investors who are - a multitude of "little" people & more significantly, large organisations such as pension funds etc. who use those profits to provide income for lots of "little" people! What goes around comes around.

[Untitled]

trickle-down economics is a myth. If you want profits to be reinvested into the energy network then you're better off nationalising them...

[davebro]

yeah - like we did with the railways?

[emmie]

and weren't they successful in their day, i remember it well..
draughty carriages, rain often poured in through the windows, late trains constantly, no investment and so stagnated.

[Zacs-Master]

The wealth is shared anyway by way of increased salaries and bonuses for the workers (who are taxed on earnings) & share dividends. People then go out and buy things with this money and are taxed on that.

This is basic economics in a capitalist society. Anything else is a step down the road to socialism.

[DTCwordfan]

what folk are forgetting is that in Covid, energy companies took a hammering - and anyway, when one looks at other business performance like Return on Investment, Return on Equity or Assets, their figures even with these so-called elevated profits are only marginally elevated and will be going down as the oil price falls back as I predicted it would once the supply network rebalanced after the G20 largely boycotted Putain's oil. Gas will come spiralling down when some Kremlin general plugs him, this ending the war.

[emmie]

that doesn't seem likely dtc, Putin is there and will stay there as long as he likes.

[davebro]

Hopefully it's failing health that will "plug" him, but I'm not holding my breath.

I think that might lead to a less traumatic transfer of power a moderation of Russia's aggressive policies.

[Gromit]

Last year BPs profits doubled.
This year they are set to triple.
BP have done precisely nothing to make all that extra money. It is not reward for being savvy or investing in the business, it is money they have got because of circumstances out of their control. A windfall.
Retrospect taxing would normally be a very bad thing to do, but the high prices are severely affecting their end users, making them a lot poorer. They are expecting a windfall tax. They will still exceedingly high profits after a tax grab.

[DTCwordfan]

after losing $18.1 bln in 2020......

[DTCwordfan]

and +/- 95 percent of it made from outside the UK.

[Untitled]

lots of countries have state-owned railways and utilities and are still capitalist.

it was a mistake to privatise our energy companies and it happened in 1990 which wasn't all that long ago... britain was still a capitalist country before 1990.