Windfall Taxes Aren’t the No-Brainer They Seem: Editorial

With energy prices soaring, thanks partly to Russia’s invasion of Ukraine, countries around the world have been experimenting with a hodgepodge of interventions to ease the pain, including consumer subsidies, price regulation and ad hoc nationalizations. Because all of these measures come with significant potential downsides, one other supposed solution has been getting increased attention: windfall taxes.

The idea of such taxes is to demand a surcharge from companies that have benefited from high energy prices, then use the proceeds to aid ailing consumers or businesses. The European Union recently proposed a “solidarity contribution” of at least 33% of the “surplus taxable profits” of ...