4min chapter

Odd Lots cover image

Isabella Weber on the Big Rethink of Inflation

Odd Lots

CHAPTER

The Argument for a Windfall Tax

The classic argument against some sort of windfall tax or price control would be, well, you don't want to artificially bring down the prices. But if we are talking about price over volume, then we are in a situation where with lower volumes firms can make more money, right? Which means that they are basically contracting their capacity. And I think that if we look at the oil sector, which on my mind has been a very important element in this inflation story, that it's quite clear that they are taking a disciplined approach to investment because they have reduced capacity.

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