Different countries have taken different approaches. Hungary, for example, is taxing a wide range of sectors, from petroleum producers to renewable energy companies to pharmaceutical companies, while the U.K. is taxing oil and gas companies within the country. Italy has seen, seemingly caused by Italian energy companies not complying with the tax.
Here in California, Borenstein, the energy economist at Berkeley, hopes the Legislature will use the special session to discuss what he sees as the Golden State’s “fundamental problem” when it comes to gas: figuring out how to maintain adequate supplies while the state is using its cleaner blend and is trying to phase out fossil fuel usage.
The logic behind windfall profit taxes is to tax a company at a higher rate when they’re making giant profits — a “windfall” — for some reason not of their own making.
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California might levy a new tax on gas companies. Here’s what to knowA California windfall tax would be difficult to implement, as state policymakers would have to decide: Exactly how much profit constitutes a windfall?
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