The "grotesque greed" of energy companies "harms the poorest and destroys the planet"

An oil extraction well. / CR

UN Secretary-General's Support for a Special Tax Spreads Across the Political and Activist Fields

The special tax to tax the windfall profits recorded by energy companies has many detractors who make themselves heard in all spheres. Since the Executive of Pedro Sánchez announced it, in order to raise 2,000 million euros a year, the affected companies and the majority of economic analysts have criticized it for different reasons: the former consider it unfair, because they assure that in Spain They obtain large revenues despite their record results in the first half of the year, and the oil companies point out that they already pay 5 points more in Corporation Tax -like banking-; the latter consider that it is not very effective, since they predict that its cost will end up having an impact in one way or another on consumers' bills, no matter how much the Government seeks ways to prohibit it.

However, Spain is far from the only country that applies a tax of this type. The United Kingdom or Italy tax these extraordinary profits at 25% -Rome has increased it this year from 10%-, and even the United States is considering doing something similar. Its president, Joe Biden, criticized the fact that energy companies are making "more money than God" and asked Exxon to start investing and paying their taxes. "The oil companies have 9,000 permits to extract oil, but they are not doing it because they earn more without producing it and letting the price rise," he fired.

This Thursday, in a harsh speech, the Secretary General of the United Nations, Antonio Guterres, joined the also large chorus of voices -especially from the political sphere- who demand these special taxes. “Combined energy earnings in the first quarter are approaching $100 billion. I urge all governments to tax these excessive profits and to use those funds to help the most vulnerable in these difficult times, "he demanded. Guterres pointed out that “many developing countries, drowning in debt and still struggling to recover from the Covid crisis, could be pushed to the brink” by the price escalation that began after the pandemic and increased by the war in Ukraine. The socio-political storm in Sri Lanka is a good example of this.

“It is immoral that the oil and gas companies that are making record profits from this energy crisis that affects the poorest people and communities and has a huge cost for the climate,” Guterres denounced during a press conference in which he denounced that the Industry is driven by a "grotesque greed" that harms "the poorest while destroying our common home, the planet."

Other additional measures

Different organizations also consider the windfall profits tax to be an initiative in the right direction. “There are strong arguments for it,” says the Tax Policy Institute, arguing that such taxes “do not create a distortion or alter behavior” of companies. Will Snell, director of the Fairness Foundation, also considers it "effective and fair" and says that objections to it are never strong. Moreover, he recalls that the United Kingdom government, for example, has already implemented them on several occasions during the last century: «In the First World War, excess profits were taxed, with respect to pre-war levels, with 50%. More recently, in 1981 Margaret Thatcher imposed a special tax on bank profits during the recession. Snell argues that the tax should be placed within the framework of other measures aimed at creating a fairer tax system.

In Spain, the Technicians of the Ministry of Finance (Guestha) also consider that taxes on profits fallen from the sky can be beneficial for consumers if they are redistributed among them. In other words, they recommend a separate discount on electricity bills that is proportional to your consumption. In this way, the extra benefits would revert directly to a clear reduction in energy prices.

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