Liu Qiangdong Proposes 90% Windfall Tax

Liu Qiangdong Proposes 90% Windfall Tax on Tech Monopolies: Justice for All or a Chill on Innovation?

 

At the 2025 Wuzhen Summit of the World Internet Conference, Liu Qiangdong, founder of JD.com, dropped a bombshell: "I suggest imposing a 90% windfall tax on tech monopolies, with the revenue earmarked for public welfare such as elderly care and education." The proposal instantly set off a firestorm of public debate—on one side, enthusiasm for "shared wealth from technological progress"; on the other, deep concerns about "stifling innovation." This discussion over tech monopolies and tax regulation goes far beyond differing opinions, touching the core of wealth distribution and social justice in the digital age.

 

1. The 90% Windfall Tax Proposal: Background and Core Claims

 

Liu's proposal didn't come out of nowhere. In his speech, he singled out trillion-dollar tech giants like Nvidia, Apple, Google, and Microsoft—Nvidia holds a 90% market share through GPU technology monopoly, with single-quarter net profit exceeding 135 billion yuan; Apple's net profit margin reached 28% in fiscal 2025, and Microsoft's Azure cloud service gross profit margin surpassed 75%. These huge profits stem from monopolistic advantages built on technological barriers, not full market competition.

 

"Wealth brought by technological progress shouldn't be concentrated in the hands of a few enterprises and individuals," Liu emphasized. Drawing on JD Logistics' practice—where 90% of manpower at its Beijing sorting center has been replaced by robots—he noted that technological substitution of labor is an irreversible trend. Without tax regulation, it will exacerbate social conflicts arising from changes in the employment structure. His core claim is clear: target "tech monopolies" with a 90% windfall tax, and use the revenue to feed back people's livelihoods, forming a closed loop of "technology nurturing society."

 

2. Divided Public Opinion: The Core Debate Between Support and Opposition

 

Supporters: A "Precise Fix" for Social Justice

 

Supporters argue that excess profits from tech monopolies inherently have a "public attribute"—technological progress relies on talents cultivated by public education and support from public infrastructure, so wealth should be reinvested in society. Currently, China has over 300 million people aged 60 and above, facing severe aging pressure, while the uneven distribution of educational resources remains a problem. The 90% windfall tax could inject much-needed funds into these livelihood areas.

 

Internationally, the U.S. once imposed a 30%-70% windfall tax on oil companies; the EU levied a 25% excess profit tax on energy firms in 2022; Germany even imposed a 90% tax on excess profits from solar power generation. In China, the "Special Profit Levy" on oil enterprises has been in place since 2006, generating a total of 210 billion yuan in three years. Additionally, some tech companies squeeze small and medium-sized enterprises through data privatization and algorithmic control—for example, high commission rates on food delivery platforms. A windfall tax could act as a "weapon" to curb the abuse of monopoly power.

 

Opponents: Beware of "Cutting the Lifeline" of Innovation

 

Opponents' concerns center on the rationality and feasibility of the "90% tax rate." Technological R&D is inherently high-investment and high-risk—TSMC's 5nm wafer fab cost over 12 billion U.S. dollars. If 90% of profits are taxed, enterprises may drastically cut R&D investment, ultimately slowing down technological iteration. Historically, the U.S. 1980 Crude Oil Windfall Profit Tax Act was repealed because it suppressed production and reduced supply.

 

More practical challenges lie in implementation: there is no clear legal definition of "tech monopoly" and "windfall profit," which could lead to policy overreach—treating normal innovation returns as taxable. Tech giants may also avoid taxes by transferring profits, splitting businesses, or relocating to low-tax regions, making the actual tax effect far from expected. If only China imposes such a high tax rate, it may put local tech enterprises at a disadvantage in global competition and trigger capital outflows. Many experts suggest replacing the "one-size-fits-all" 90% tax with more refined measures such as "progressive excess profit tax rates" and "R&D tax credits."

 

3. International Insights and Domestic Practices: How Should Tax Regulation Work?

 

Using taxes to regulate excess profits of monopolies is not a new idea. Internationally, the EU imposes a 3% Digital Services Tax on tech companies with global revenue exceeding 750 million euros and EU revenue exceeding 50 million euros, addressing the "mismatch between profits and taxation in the digital economy." Germany imposed a 90% windfall tax on excess profits from photovoltaic and wind power enterprises to cope with the energy crisis. While the U.S. hasn't introduced a windfall tax, it restricts monopolistic practices like platform "self-preferencing" through the Digital Markets Act.

 

Domestically, China has some practical experience. The "Special Profit Levy" on oil, implemented since 2006, levies a five-level progressive tax of 20%-40% on crude oil sales prices exceeding 40 U.S. dollars per barrel, serving as an effective tool to regulate excess profits of resource-based enterprises. In recent years, China has strengthened anti-monopoly supervision over the platform economy—for example, Alibaba was fined 18.2 billion yuan for monopoly practices—but tax regulation still mainly relies on the 25% corporate income tax, with no special tax policies targeting tech monopolies.

 

4. The Way Forward: Balancing Innovation and Fairness

 

Liu Qiangdong's proposal is not so much a directly implementable policy as a precise questioning of social pain points—in the digital age, how can we ensure that the dividends of technological progress benefit more people?

 

To answer this question, first, "legislation must take precedence." Special legislation should clarify the criteria for identifying "tech monopolies"—such as market share, technological barriers, and data control—to avoid subjective policy implementation. Drawing on the oil Special Profit Levy model, set a threshold and progressive tax rate for the windfall tax, taxing excess profits in segments instead of a "one-size-fits-all" 90%.

 

Second, "supporting policies are essential." While levying the windfall tax, provide tax credits or financial subsidies to enterprises investing in basic research to ensure high tax rates do not stifle innovation. Establish a special fund for windfall tax revenue, clarify the specific proportion used for elderly care and education, and introduce third-party supervision to ensure every cent is spent effectively.

 

Finally, "international coordination is indispensable." In a globalized context, a single country imposing a high windfall tax on tech giants may trigger capital outflows and trade frictions. China needs to actively participate in the formulation of global tax rules such as the OECD "Two-Pillar Solution" to promote international consensus.

 

Technology is the engine of social progress, and fairness is the cornerstone of social stability. Liu Qiangdong's proposal may be controversial, but it forces us to face an important question: when wealth concentration from tech monopoly exceeds a reasonable boundary, we need to find a way to balance innovation vitality and social fairness. There is no one-size-fits-all answer, but only through discussion and exploration can we find the most suitable solution—after all, true technological progress should ultimately make everyone feel its warmth.