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It's a second claim that it makes, which is the claim about rising energy prices, and the hidden claim within that is, but on whom will the incidence of the tax fall? Two reasons why it will fall on the company and not the consumer: number one, governments have, and in many cases are instating price caps. It's specifically to ensure that the incidence of the tax won't fall on the consumer. But secondly, and structurally, I say there's an overall rise of negative public sentiment against these companies to begin with, right? Like, imagine that the government taxes them, and then the next day you're like, "Wow, oil was 350 in Arizona last night, and now it's 450." People aren't fucking stupid, and they're watching that change happen. And the more Shell is taxed, the more they take you for their money. Before I engage with opening opposition, I'm going to take Jason. Go ahead. |
<poi> |
Where polarization crucially occurs, the very most opponents will always invent a problem with your budget and critique the government regardless. Why does this mean that you always want to create the best possible budget when you'll always be critiqued and always be attacked in a polarized context like you suggest? |
</poi> |
They want to get elected. Yeah, that's the one, because what happens is when you're running these close races, and when you know you're taking a big risky move like a fucking windfall tax, this policy might be the reason you win or lose an election, which means that you have to ensure that the next state is something happening in Liverpool or Manchester, which shows the gains from this risky policy. |
Opening opposition: a couple of claims. One, the argument from legitimate wealth: they said you worked for it. You've worked to do lots of bad things in society, but if there's a third-party harm on someone, you do not deserve that wealth. Secondly, it's important to understand that this wealth was not directly gained. If I work and get a PhD from Harvard and then I win the lottery the next day, one does not have to do with the other. That's why this wealth is not legitimate. Second, taking out all of their fancy economic analysis, boiling down their argument on redistribution to a sentence: "Rise in oil company profits are a more effective form of distribution than the government." I think that's insane. I'm going to the bucket, I'm going to the bucket, but I think that's categorically insane, and I don't think they should be allowed to get away with that for a couple of reasons. |
One, the government has electoral incentives to ensure that the taxes that they use are distributed fairly. Second, they have an underpinning welfare state that these people don't have. Poor people don't have pensions across the world. For a lot of people who do have pensions, invest in these specific oil companies might not be the people who are most suffering while the government can be much more active in its redistribution. I cannot believe that they ran that. But finally, on this renewable stuff, you know what? It goes either way, panel. We've shown to you that the tax incidence falls on these companies that disrespected for institutional investing and also that the side is a better precedent. I'm very, very proud to oppose. |
</gw> |
<ow> |
Yes, I do realize too that I seem to go against this debate dog thing of you see stuff that's been thrown at you by the government, and you buy it because you have to disagree with everything they're saying, which is why I read the motion like five different times to be sure I'm not the one who isn't paying attention. There are huge profits that are being made by these companies because if there aren't, this motion does not apply, and it doesn't matter, and we can all go home, right? Given that those huge profits exist, and given that I've signaled in a POI to Naomi that this is what we will do, right? We will point out we also probably think it's good to protect consumers. We just think that's not a good way to do it. |
There are better ways to do it. Naomi's response was, "Oh no, but the windfall tax is direct, targeted, and it harms us properly." What Tin and I are telling you is that if that's what you want, there are other ways in which you can also apply policies that are direct, targeted, and harm those profiting that achieve their goals better, which is why I think closing opposition should win this debate. Now, here's the thing. I don't think we are connecting a world simply because, again, if OO was trying to say that these companies aren't going to make huge profits, this motion wouldn't exist because this is not about taxing revenues; this is about taxing profits. So what that means is that simply the fact that the price of crude oil has gone up worldwide doesn't mean that the companies that provide energy, because they're taking that oil and they're turning it into energy, sending it to consumers, they still want to make large profits because their costs also increase, and they would simply be passing on those costs onto consumers. |
That's not profit; that's revenue, right? So what that means is that if we are talking about huge profits, it means that those companies, additionally to the increases that already happen anyway because the raw materials increase, they are able to massively profit off it, right? So like OG and CG give you all kinds of various arguments on why there's tons of political capital to hit all companies to ease pressure on consumers. If that is true, great. Just use it better. CG says, "You know, governments can institute price caps." And they've kind of tried to do that—like they haven't really tried to do that. I think that's that's a thing they can do. What I'm telling you is take all of the political capital that you want to spend on windfall taxes. I'm telling you windfall taxes aren't going to work as great as you think they will, and instead, put it on price caps. |
What's the difference? Because I do feel dumb when Harish laughs at me, right? But I genuinely think I'm getting this right. Here's the thing: windfall taxes mean you allow the company to profit, meaning you allow them to put a huge markup on the things you are passing on to consumers, meaning the consumers need to pay those huge prices for the profit to be there in the first place. Then you take a small part of that pie of the profit and you say you go give it back. It's kind of like looking at a hole in the Titanic. Instead of trying to block the hole in the Titanic, you take a bucket and throw water out of it. Yes, you will throw water out of it with a windfall tax, like you're taking some of those profits, and you can give it back to the people, but it's much smaller than the damage that is being done. Unless you tax those profits at literally 100%, which I just don't think is likely. |
And if you wanted to run that, you should have made it clear in P.O.I. So, here's the thing: we are telling you instead of allowing those profits to keep rising and saying, "You know they're not that great; we want a share of that," we're saying don't allow them to make those profits in the first place. Why? Because they're the incentives of the companies. I have to minimize their tax bills; they're to maximize whatever is left after the tax. If I have the choice between earning a million dollars and paying a hundred thousand dollars in tax because you tax me more because I'm rich, I would much prefer that over only earning a hundred thousand dollars in total, and then, you know, I still maybe only pay a thousand dollars in tax, and like that's a much lower tax rate. It's a much lower overall tax bill, but also the size of the pie that I'm left with after those lower taxes is smaller, meaning that if you have windfall taxes, companies are still going to choose to maximize profit as much as they can because what taps them currently is the price they're able to get on the market and the fact that there's very low elasticity of price for things like heating because people need to heat, like OG gives you all of that, right? |
So what that means is that when you need to intervene those companies making those profits rather than just saying, "Well, you know, we want the tiny size of that pie and maybe give it back to people." So, yeah, actually, I'll take OG. |
<poi> |
Okay, companies can't increase prices a huge amount, obviously, because they're already trying to maximize, as you were noted, and they will not just keep increasing profits. They'll put the prices to the point where you have reduced demand. That is why you don't have the effect you are talking about. |
</poi> |
But the problem is that the kind of profits that we are seeing, they are generally going to be the kinds of things that are see realized in the moment. That is the first answer. |
And the second thing that I think is important here is you need to distinguish between the energy companies that are uh are simply buying raw material and—okay, no. The the other answer to Harish is basically that there's only so many reserves you can have; they're usually at pretty much 100% anyway, and like when you feel them, it doesn't really matter. What matters is that when the price is high and you increase your profit margins, you're able to make profit, because note that if you buy that energy cheaper, that is reflected in your profit margins because the profit is, again, the difference between what you buy and what you sell. So that doesn't even make sense, Rich, but because that would be then reflected. And then if we stop you from having those profits, then that is great. |
But then what we also need to pay attention to is that probably what makes a difference is also where those profits are being made because if you are trying to target extractors, like good luck targeting, like Saudi Arabia or Venezuela, or Russia would windfall tax is not going to happen, right? So that probably means that if you want to target those companies making a ton of profits because they're extracting their own resources and storing it and selling it on the global market when the global market price is high, you don't—I genuinely don't think you can prove that Russia is going to implement the windfall tax for their companies or that Saudi Arabia will do that, right? So then the only way you can target them is you target them at the moment where they introduce that thing on the global market, which is what we've seen you trying to do. |
Like, it pushed a shit ton of money to Russia even though, you know, trying to threaten they will no longer buy gas from Russia. But the only moment in which Russia's profits actually started to hold and Russia's economy actually started to take a hit is when you put a price cap on how much they are willing to pay on Russian oil. We are telling you that that is something that we have seen work, and it is something that we should continue to have. But second, the main data here—and because that's where you realistically have some sort of influence—are the local energy companies that are profiting. They're literally making billions—like, it's—I don't know the names in the UK, right? But there's like the Vienna Energy Company that had literally billions in profit last year, and it's not because they didn't always have like a 100 reserves that they fail whenever the price is low; it's simply because they were able to push the prices higher. |
And if if if you tax that—sorry, if you prevent those profits from being made, that is when you get everything that is telling you of—you get lower inflationary pressures because you get lower spikes in consumer goods prices. You also get, because you get lower inflation, then you also get lower hikes in tax rate, which means debt doesn't become that much more expensive, which means that you just make the problem smaller instead of finding the inefficient way to solve it. It's very proud to oppose. |
</ow> |
<pm> |
Pretty straight forward case from opening government, we came to see that oh there is principle of legatee, that will lead to better outcomes for the poor and ultimately let better long-term outcomes for investment and infrastructure for the energy sector. |
Whatever, we will have substantial taxes on additional profit. Notice profit, not revenue. So, the bottom line for companies for the additional money that they make in terms of increased prices, not the core business. So, in the same way that tax and like toxic rockets are based on incomes, your additional income or your additional net profit is going to be taxed. |
We will use these tasks, we need to subsidize energy for these four minutes. I'm going to characterize this debate, why we think energy prices are currently high and why generally they're high in the status quo. The reason why energy prices are so high is primarily because of the conflict in Ukraine. |
That is that have been embargoes and often taken against Russia to not buy their oil, and therefore the supply of oil and the supply of energy has gone down. And that has led to increased prices because companies in the West know that they can charge higher prices. Lining up of principle, do we think that this arbitrary scarcity should be taxed? |
We think, one, how can you don't deserve this money insofar as we think that people occupied when you're fighting better or superior service and you provide service for more individuals. The fact that you arbitrarily had scarcity and there was a global situation and actually a tragedy that led to you having an arbitrary advantage shouldn't mean that you get additional benefit from that. |
So, enterprise companies don't deserve that money. We think they deserve to be taxed. But secondly, when do we tax? I think that we tax, especially an additional marginal tax on those who unfairly benefit from society, and we take that tax and give it to those who are exploitative. That is why we have additional taxes on the rich who are able to exploit and take advantage of society and we give them back to the poor because those are the individuals who were exploited to support those who are rich. |
Insofar it's not the case, I think we justify only two-prong level of principle: why one completely deserves this money and two why those were exploited by these increased prices due. enterprise is not the case. I think we need a justification from opposition why these companies deserve this money. I think any team that tries to explain why this profit is more than justified is going to lose. Yeah, |
<poi> |
these companies necessarily are making extraordinary profit when you tax them. One is this health supports version and two it's just the subset of companies who made profits in that specific period. |
</poi> |
I'm just confused with POIs. I think like the motion presumes that companies have made an additional profit. If they haven't in the status quo, we're happy to support a general principle of taxing companies. |
And to be clear, I think in the vast majority of instances, the reason why energy prices are high isn't because companies have decided to revolutionize energy and provide a better service. Maybe vast majority instances prices of energy go up because of arbitrary scarcity. And so we generally support the principle of taxing businesses when they make a large amount of profit based on that arbitrary scarcity, and we think this goes beyond energy. |
We're highly supported in other instances as well. Second argument: why do you think subsidizing the poor is good? I think this is obviously a huge intuitive impact as far as it's massively increasing the affordability of the poor and makes sure that people are able to afford basic necessities. I think the price of energy is probably currently one of the biggest factors that is limiting household income and often means that families can't put food on the table because the price of gas is so high for them to be able to, no thank you, to go to work and for their children for them to be able to heat their homes when the temperature is cold. |
I think at the point in which we're able to subsidize energy for those who are most vulnerable, that's a huge impact for our side of the house. To be clear on mutual accessibility, we think that it's quite obvious that justifying as a politician why money taken from exploitative energy companies given to the poor for the purpose of energy is probably one of the easiest qualities to justify to the public. To say using this tax money for this purpose is probably the right way to go. |
It's not the case any kind of opposition counterpart needs to argue why should my people to get a policy that's not this quick just as effective economically and just as politically at our policy, given it's probably very, very easy for politicians to justify why this money should be spent on the poor, given that they're the ones who are most exploited and most vulnerable to these price spikes and given that these price spikes are arbitrarily benefiting companies on the basis of scarcity. Go |
<poi> |
yeah, so the extension of your principle is that you set the swimming pool tax at 100 because all of it's arbitrary. Do you support that? |
</poi> |
We don't support 100% tax enterprise. We think on the important there is some additional service that big companies are having to provide, but we support like substantial like 60 to 70 taxes perhaps. But I think this is, you know, but the general principle I don't, I, you know, I'm not that good at maths and finance, so pick whatever number you think is reasonable and we'll go with that. |
Um, third argument: why do you think this will lead to more investment in infrastructure and lower prices in the long term? The reason for this is because at the point of which your bottom line profit is being taxed, it's in your incentive to not have as much of a profit. Do you want the way that you do that effectively as a company is often to invest in capital expenditures that doesn't show up in here? |
It's not the case it is in the incentive of energy companies to rather than letting money go to like run, rather than letting that money trickle down to the bottom line and then getting most of it taxed, which is a waste, to actually use that money for something that will benefit their business in the long term. What that means is investing in capital in infrastructure and investing in things that will increase the value of energy in the long term. |
Secondly, I think often, and as we've characterized, the reason why energy prices are high is because of artificial scarcity. What this looks like in the real world is companies often colluding to meet sole providers in certain geographical regions such that they can charge whatever price they want in that region because there's incentive for these companies to collude together and just, you know, kind of taper off different regions and just split them up between themselves such that one company can benefit from the monopoly that they have in that area. |
The reason why that's important is because what that means is that it's in your incentive to decrease supply because you can charge a higher price for that as an entry supply company, and insofar as demand for energy is inelastic, increasing prices will increase your profit on average as far as the amount that your demand would decrease by is offset by the amount of your price increase. |
Insofar as that the case, I think we are able to tip that incentive enterprise. The marginal benefit that you get from raising the prices is now hugely, hugely counteractive by the massive taxes imposed upon you. At that point, the superior strategy to generate more profit in the long term is actually increase supply and be willing to take the hit on price. And so far as when prices are low, the windfall tax no longer applies. |
Insofar the case, we dramatically change the incentive for companies to create more difficult scarcity and to, for example, shut down supply plans, which they've done in the past in order to decrease supply and increase prices at the point. It was not the case I think you're likely to increase the supply of energy around the world and reduce prices for those who are most vulnerable. |
The third point here is that we think specifically kind of capital investment take place is going to be in renewables. The reason for that is because if you're going to allocate your money towards a certain kind of expenditure, you might as well do it towards something that you're going to get additional tax benefits from. Governments are currently offering massive benefits to companies for investing in renewables. |
The reason why they don't do it in the status quo is because the marginal benefit for renewables doesn't make up for the additional benefit that you can just get from price gouging customers on your core business. The way we switch that is, again, by reducing the marginal benefit of price gouging and by increasing prices and rather increasing the increasingly beneficial companies when they actually invest in in in ... |
What are the impacts of this argument? One, I think across the line we get reduced costs and increased supply for the vast majority of individuals as far as we increase the incentive of companies to, instead of increasing prices as a way of maximizing revenue, to rather decrease costs and increase supply. They're likely to have increased renewables. |
And tax on all those grounds. |
</pm> |
<lo> |
A few observations about that speech. One, Nikki cannot model that they're going to use the excess revenues that come from this tax and funnel it into subsidizing energy for poor people. Important reason that CO correctly points out in a POI: this is a simple explosion, therefore they do not get yacht to say where this money will go. |
Secondly, and as much as subsidization is likely to happen on either side of the debate, which is the largest margin is in instances where it is politically unpopular. If you justified subsidies in this instance, Mighty, there are strong degrees of political opposition to such subsidies in certain instances. |
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