*Windfall taxes, price caps and VAT cuts: how nations are addressing Europe’s energy crisis.*
Reducing sales taxes (such as VAT) is a good thing to do since sales
taxes fall mainly on the poor. Governments should tax rich people's
gains instead of poor people's purchases or poor people's income.
Limiting the price of fossil fuels or electricity is a mistake,
because people must be under pressure to use less of them.
Subsidizing the cost of fuel is a dangerous addiction.
Instead of reducing what poor people pay for energy, the right thing
to do is to support them unconditionally with enough money to get
by. Those who don't spend it all on energy will be able to use it for
other things.
A windfall profits tax will not directly help the poor or conserve fuel,
but it will give governments income, so that the money for the poor
does not all have to come from deficit spending. And it will slow the growth
of economic inequality, which tends to make society more cruel and unjust.