Awindfall gain is an unusually high or abundantincome,net profit orprofit margin, that is sudden, unexpected, or, at times, anticipated.[1]
Examples of windfall gains include, but are not limited to:
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 thePermanent Income Hypothesis.[1]
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]
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 awindfall profits tax.[3]
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