Publication: CalMatters

UCLA Expert: Kirk Stark: Professor of Tax Law and Policy, UCLA School of Law; Faculty coordinator, UCLA Colloquium on Tax Policy & Public Finance

Synopsis: Governor Newsom proposed a new windfall profit tax on oil companies. The logic behind windfall profit taxes is to tax a company at a higher rate when they’re making giant profits — a “windfall” — for some reason not of their own making. 

UCLA News: Stark said there’s often “a moral dimension to the thinking as well.” Theoretically, taxing extra high profits at an extra high rate should make companies less likely to capitalize on circumstances like war and natural disasters to jack up prices. “There’s almost a kind of moral judgment that, in some situations, market prices can be immoral,” he explained. 

Read more at CalMatters.