ifo Viewpoint

Eight Reasons Why an Excess Profits Tax Is Not a Good Idea

Clemens Fuest
ifo Institute, Munich, 2022

ifo Viewpoint No. 237

There are currently increasing calls to impose a special tax on the rising profits of energy companies, also known as an excess profits tax. These companies are accused of profiting from the war in Ukraine, which has led to a shortage of energy supplies and sharply rising prices. Some politicians are stoking the mood by speaking of “war profiteers” and a “tax on greed.”