If there are no windfall profits during boom times, are you equally onboard with subsidies during lean times?
If the banks are doing something predatory then that behavior should be stopped. Not being able to define it and then seizing an arbitrary portion of the profits isn’t going to stop it in the future. Hell, since profit is after expense, they can increase CEO salaries to reduce it and be taxed less!
Plus if the “crime” here is fleecing depositors with interest rate spreads, they should make them pay that arbitrary percentage to each depositor based on their pro rata share over the coarse of the year.
Otherwise you’re taking some pensioners’ low savings account interest and giving it to away to someone else entirely.
> are you equally onboard with subsidies during lean times?
The problem is that these companies do receive subsidies during lean times, in both energy and banking fields, whether you want it or not. They are too important to be let to fail, and the governments will either subsidize them, bail them out or just plain nationalize them. In the case of Greece banking crisis, they nationalized the losses of foreign banks...
So a windfall tax makes sense in these industries, maybe in others too.
At this point, the EU has the worst of both a free market based economy and a planned one. Profits goes to corporate owners when they exist and losses are taken up by the general public through subsidies. It's very comfy for our corporate overlords and the old generation who could afford to become shareholders in these companies when public policies actually helped them but it's a raw deal for the rest of us. Sadly, old people are the one who still vote and put our governments in place so I don't expect things to ever get better. I guess it's doomed to happen when the median age of your country hits 45.
In the UK (but Italy as well), banks are routinely bailed out. Government takes over, absorbs liabilities, sells back to the market an unburdened company ready to make new profits (and new debts).
Utilities are similarly bailed out, because what are you going to do, leave people without water and electricity?
If we have risk floors, we should also have profit ceilings.
In the US utilities are subject to profit ceilings, and I'd be surprised if that wasn't the case in Europe. That's one of the reasons to classify something as a utility. By "energy companies", I'm assuming the top comment means fossil fuel companies.
Ideally we'd just nationalize them: state- or municipality-owned power companies in the US routinely provide cheaper and better service than their private counterparts[1].
I've seen that not working in Europe: they got defunded to oblivion. Now the situation is in one EU country, 25% of water that goes through the pipeline, gets leaked. Because the household utility prices were frozen (kept absurdly low) for almost 10 years, no investments could be made.
I'm really puzzled at this time, because I can clearly see huge issues in either wholly privately-owned and public utility companies. It's about time we figured this out, we sent men to the moon for god's sake!
If the banks are doing something predatory then that behavior should be stopped. Not being able to define it and then seizing an arbitrary portion of the profits isn’t going to stop it in the future. Hell, since profit is after expense, they can increase CEO salaries to reduce it and be taxed less!
Plus if the “crime” here is fleecing depositors with interest rate spreads, they should make them pay that arbitrary percentage to each depositor based on their pro rata share over the coarse of the year.
Otherwise you’re taking some pensioners’ low savings account interest and giving it to away to someone else entirely.