Windfall profits

Windfall profits are one-time earnings far above the norm. These profits are typically caused by a rare and highly favorable event that impacts an entire industry, group of companies, or just a single organization. For example, the oil and gas industry sometimes benefits from very high price points for oil, from which they reap windfall profits.

When inordinate profits are earned, there may be a push to tax the extra earnings. The typical response is that the beneficiary needs to invest the extra funds in order to be ready for an offsetting decline in earnings at a later date.