Recently, there have been several letters to the editor warning Americans not to dare tax corporations, because any extra expense incurred by corporations will be passed cent-for-cent on to consumers. These are the same people, I assume, who claim to believe in capitalism and the free market. And yet they don’t see where these two positions collide.
Suppose Exxon made, I don’t know, 11.7 billion dollars in one quarter. Hypothetically. Now imagine they were taxed at the normal rate for the first five billion dollars of profit, but at a higher rate for the last 6.7 billion dollars. Granted, they could sink that last 6.7 billion into renewable energy, pay no extra taxes and ensure their future even as oil becomes more expensive to drill. Or, they could eat the extra taxes, make one billion dollars less than they would otherwise, and still make more money than any other company in the world, and tie their own record for most profitable quarter ever.
However, if you ask the brain trust that is the IR opinion page, they will instead increase their prices in an effort to recover the revenue lost from the increased taxes. In this scenario, every other oil company would also do this, not one of them settling for slightly less profit in order to increase their market share. (Also, every other oil company will somehow be affected by the windfall tax, because all oil companies have the same financial situation and therefore would be equally taxed.) If this is really the case, corporations are more terrifying that even most liberals assumed, effectively blackmailing voters into voting against any corporate taxes.