Once established....you'd have a agency/group to monitor the companies involved, and spend hours reaching a conclusion that something-is-not-right-but-you-can't-say-what.
So after 2,000 man-hours of audits....you conclude they must be hiding data, and there's just too much profit. You get 'Timmy' (your numbers guys) to invent a maximum profit level....then start taxing.
The company reviews your action, and immediately lessens production or service. It might be one-percent....maybe three-percent....maybe even ten-percent.
'Timmy' tells you a month later....the numbers changed. What 'Timmy' is missing...is that you shifted the product to a slower schedule, or that you moved some production outside of the country.
A new problem is developed (oddly)....there's a shortage of X-product.
A new agency/focus is started....to figure out why shortages now exist. They hire a 'Timmy-2'. His numbers reflect a problem where you need more incentive (cash-flow/profit).
Timmy-1 and Timmy-2 fight over the analysis.
Eventually....a new agency is formed....there seems to be too much regulation. They hire a Timmy-3 to show the numbers.
Someone at this point figures out....the whole excess profits tax has only one purpose....hiring more people to fix a non-existent problem.
2 comments:
Seriously, you need to do some reading on what windfall profits are, and what excess profits are. These are well documented phenomena. When Shell posts 94 billion dollars profit one year, and projects a 94-105 billion dollar profit for the next, but then suddenly makes 943 billion dollars, it means that they exploited market conditions to screw the consumers by adding on excessive costs that weren't part of regular supply chain issues.
On some windfall models, everything above the projected 105 billion would be taxed at some percentage (up to 100) given that it wasn't through any positive action of the company but merely price gouging.
The one thing I've noted over 30 years....when the gov't starts to say X is the profit limit...companies wise-up, and either produce less-product (creating a fake shortage), or they move the product-production out-of-the-country. Doesn't matter if in the US (particularly California), or Europe (particularly Germany).
The whole reason we have a pharmacy/drug shortage in Germany (production in India/China)....is that regulation went to an extreme.
I won't argue about excessive costs coming out of thin-air.....various gov'ts are skilled in the same tactic. Military equipment issues follow the same path.
Everyone, from charity operations, to sports entities....onto commercial companies and state-gov'ts....all have these gifted skills. Even churches have this strategy.
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