Democratic members of Congress are suggesting a new tax on huge oil firms.
They say this will “curb profiteering” by channeling earnings connected to increased crude oil prices to support drivers’ salaries and benefits.
Known as the Big Oil Windfall Profits Tax Act, it was introduced on Thursday by Sen. Sheldon Whitehouse of Rhode Island and supported by 11 other Senate Democrats.
It would obtain a portion of the profits that businesses are actively garnering from oil at its greatest premium in over a decade and distribute them to consumers in the form of quarterly rebates.
Calling Out Big Oil Companies
Recently, Whitehouse said, “we’ve already been through this.”
He declared fossil fuel companies should not be able to “make huge profits by taking advantage of a global disaster” again.
We cannot allow the fossil fuel industry to collect a massive payout by taking advantage of an international crisis. I propose sending Big Oil’s big windfall back to the hardworking people who paid for it at the gas pump.
— Sheldon Whitehouse (@SenWhitehouse) March 10, 2022
According to a bill overview released by his office, oil corporations that produce or buy at least 300,000 barrels of oil each day will be subject to a per-barrel tax equal to 50 percent of the gap.
This is between the actual price of a barrel of oil and the pre-pandemic average selling price for every barrel between 2015 and 2019.
If the taxpayers have earned enough money, the funds will be returned to them in a tax rebate.
With a $120-a-barrel oil price, the tax would raise about $45 billion a year, with qualified single filers getting about $240 a year and joint filers getting about $360 a year.
In the House, Rep. Ro Khanna, head of the Oversight and Reform Committee’s Environment Panel and a vocal opponent of the oil and gas sector, organized a companion effort to the Senate’s legislation.
Khanna explained the bill was intended to “hold big oil responsible.”
Democrats unveil plan to issue quarterly checks to Americans by taxing oil companies posting huge profits https://t.co/xELtupVxIL
— Politics Insider (@PoliticsInsider) March 10, 2022
In his words, “these corporations have made billions and utilized the proceeds to benefit their stockholders, while normal Americans are suffering at the pump.”
The President’s Speech
Joe Biden told oil companies not to raise their prices in an immoral way to make more money when the Russia-Ukraine war is making crude oil prices even higher. This decision is in line with Biden’s advice.
In a speech on Tuesday, President Biden said, “There is no justification for price hikes, profit padding, or any other type of attempt to take advantage of this situation.”
Operators in the oil business have said they haven’t done anything wrong and the price of their goods is set by the price of oil, which is set by the global market.
In an interview with the Wall Street Journal, Mike Sommers, CEO of the American Petroleum Institute, said, “I believe they need to cease the rhetoric that, you know, this sector is looking to profit from a horrible time in United States history and world history.”
Since crude oil prices soared to more than $130 a barrel earlier this week, the markets have begun to cool.
Prices on the worldwide and U.S. benchmarks were last seen at around $109 and $106 a barrel, respectively, after trading.