Taxes in the Time of Coronavirus: Is It Time to Revive the Excess Profits Tax?

Abstract

A recent NY Times headline summarizes one of the biggest economic impacts of the current pandemic: “Big Tech Could Emerge From Coronavirus Crisis Stronger Than Ever.” At a time when most American citizens and businesses suffer catastrophic economic damage from the Coronavirus Recession, some corporations such as Amazon, 3M, Gilead, and Zoom see their profits rise dramatically because of the pandemic. Given that most corporations are losing money but some are now earning excess profits due to the crisis, it is time to revive the wartime excess profits taxes that the US deployed in WW1 and WW2 to prevent the winners from achieving this form of opportunistic unjust enrichment. In what follows, I will first briefly summarize the WW2 historical experience (part 2) and then propose how it could be implemented today (part 3). Part 4 concludes.