Do we need an excess profit tax?


Letter to the editor:

The cost of living is at a new record high. Inflation imposes a hardship on the entire country. Few can ignore the consequences other than the very wealthy. We can complain and point fingers we may feel better, but it affects nothing.

The higher cost of key items has a ripple effect on many others. Oil is scapegoat of the hour but there are many others. The production of oil is in itself costly and speculative before we ever begin produce anything from it. First, we have environmental concerns, second is getting it a refinery, third is cost the refinery, fourth get the final product to the end user. Each of these steps has its own cost. If we look at each one individually, they don’t seem to cause a hardship but combined they all add to the final cost for the consumer. The question then becomes where we can cut cost and not adversely affect the product and who profits from what is in the process and what is a reasonable profit for the effort.

Profit is the driving force for any product. Individuals must benefit in some manner to make the effort. The question soon turns to what is a fair profit? Who benefits from the profit generated in the process? The next question at what level does profit become greed and exploitive of the end user?

To contain inflation, we must contain cost by telling producers we will tax any profit beyond what is reasonable.

If oil can be recovered from the ground, then refined, and sold as various products at $40 a barrel for a reasonable profit then we have starting point. Profits after that point now become excessive. Next is to restrain variability caused by supply issues disrupting production.

Taxing the greed of those who take advantage of disruptions for personal gain is one way to take control of inflation. We must be ever vigilant watching every step the in a production process to see who gains how much and tax all excessive profits at every level of the process.

The same excess profit tax must be applied every product. We must govern profits on medicine, food, clothing, all that we see today as necessary for normal comfortable lifestyle.

William Gerhard, Scipio

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