Given that stealth price controls in the form of “excess profit taxes” have recently become a topic of discussion it might be useful to take a trip through history to review some previous attempts to control money supply driven inflations with price suppression. Before we start, a quick digression. The accepted view is that modern economies use taxes to discourage the production of goods and services of which they want less – for example carbon, alcohol and tobacco. Surely then if we tax the alleged “excess” profits of the providers of critical commodities and services and apply the same logic, we will get less of those critical commodities and services and thereby actually create additional inflationary pressures – food for thought.
