Unusually high income that is sudden and/or unexpected
A windfall gain is an unusually high or abundant income, net profit or profit margin, that is sudden, unexpected, or, at times, anticipated.[1]
Types
Examples of windfall gains include, but are not limited to:
Uses
What people do with windfall gains is subject to much debate. While they differ from one account to the next, most economists hypothesize that the majority of the gains are saved, due to the Permanent Income Hypothesis.[1]
Windfall profits
Windfall profits are a type of windfall gain. They can occur due to unforeseen circumstances in a product's market, such as unexpected demand or government regulation.[2]
Taxation
Since windfall profits were unforeseen, some legislators believe that taxing them at a higher rate, or confiscating them outright, should not hurt the company. This type of taxation is known as a windfall profits tax.[3]
See also
References
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