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The windfall tax

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  • Lucy Chennells

Abstract

This paper analyses the windfall tax on the privatised utilities, introduced in the 1997 Budget. It describes the main arguments put forward for the tax and sets out the details of its scope, scale and method of implementation. The tax is examined against the guidelines of economic efficiency, fairness and administrative feasibility. A one-off tax based on past profits should be efficient, provided that the statement that it is one-off is credible. However, as a tax levied on companies, it does not directly tax the windfall gains that were made in the past by shareholders in the companies concerned.

Suggested Citation

  • Lucy Chennells, 1997. "The windfall tax," Fiscal Studies, Institute for Fiscal Studies, vol. 18(3), pages 279-291, August.
    • Handle: RePEc:ifs:fistud:v:18:y:1997:i:3:p:279-291
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    File URL: http://www.ifs.org.uk/fs/articles/fslucy.pdf
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    References listed on IDEAS

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    1. Jonathan Leape, 1990. "The impossibility of perfect neutrality: fundamental issues in tax reform," Fiscal Studies, Institute for Fiscal Studies, vol. 11(2), pages 39-54, May.
    2. Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790, April.
    3. Colin Mayer & John Vickers, 1996. "Profit-sharing regulation: an economic appraisal," Fiscal Studies, Institute for Fiscal Studies, vol. 17(1), pages 1-18, February.
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    Cited by:

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    2. Ho-Yin Yue, 2012. "Why housing price in Hong Kong? An explanation in game theory approach," Economics and Business Letters, Oviedo University Press, vol. 1(3), pages 8-15.
    3. Michele Moretto & Paola Valbonesi, 2004. "Opting-out in profit-sharing regulation," Industrial Organization 0403001, University Library of Munich, Germany.
    4. Brian Bell & Richard Blundell & John Reenen, 1999. "Getting the Unemployed Back to Work: The Role of Targeted Wage Subsidies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 339-360, August.
    5. Kara, M. & Syri, S. & Lehtila, A. & Helynen, S. & Kekkonen, V. & Ruska, M. & Forsstrom, J., 2008. "The impacts of EU CO2 emissions trading on electricity markets and electricity consumers in Finland," Energy Economics, Elsevier, vol. 30(2), pages 193-211, March.

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    More about this item

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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