Democrats Unveil Bill to Tax Big Oil’s Profits and Send Checks to the Public

On Thursday, Democrats introduced a bicameral bill that would levy an oil and gas tax and redistribute the funds back to the public. currently facingAAA reports that this is the highest ever gas price in the United States.

Rep. Ro Khanna (D.California), along with Sen. Sheldon Whitehouse(D-Rhode Island), introduced the Big Oil Windfall Profits Act. This would levy an additional tax on each barrel imported or produced by large oil companies.

Barrels would be subjected to a 50 percent tax on any difference between the current price and average barrel price between 2015 and 2019. The tax would only apply to large oil companies such as Exxon Mobil or Chevron. This tax discourages large oil companies from maintaining high prices without threatening their market share.

Consumers would be eligible for a quarterly rebate of the tax revenue. Checks for individuals earning more than $75,000 annually, and couples earning over $150,000, will be phased out. Single filers would be eligible for $240 per annum, while joint filers would be eligible for $360 per annum, according to lawmakers. The tax raises approximately $45 billion each year.

“We’ve seen this script before, and we cannot allow the fossil fuel industry to once again collect a massive windfall by taking advantage of an international crisis,” Whitehouse said in a statement. “Over the longer term, speeding up the transition to renewables will lower energy costs, insulate consumers from price spikes, and reduce Western nations’ dependence on foreign despots and greedy fossil fuel companies.”

11 senators cosponsored the bill, including Senators Bernie Sanders and Elizabeth Warren (D.Massachusetts), and Ed Markey. As oil companies are under increasing scrutiny, the proposal is timely. Inflation: Take advantageRussia’s invasion of Ukraine has caused inflation and instability that has pushed up prices and brought in record profits.

Climate advocates praised the bill, saying that it’s a step toward hampering the greed of oil and gas companies. This bill may not have an immediate effect on gas prices. largely decided by the intergovernmental oil organization OPEC, it could disincentivize the oil industry from investing in stock buybacks and dividends, which they’ve They have done it in spades, as their profits have risen.

Jamie Henn, Fossil Free Media Director explained that the proposal could spur companies to invest in moves which would stabilize the energy supply and provide much needed aid to the public. Shareholders were pressuring companies to drive up share prices at the public’s expense.

“If you’re looking to drive a share price up, you want to drive up the price of oil, basically,” Henn told Truthout. Instead of increasing production in response to pandemic-related inflation and the Russian invasion, oil companies decided, “let’s use this money to reward our shareholders and try to inflate our stock price,” Henn said.

Indeed, oil and natural gas companies are currently reaping huge profits and rewarding shareholders and CEOs. Accountable.US has released a report. December:The top 24 oil-and-gas companies made $174 billion profits in the first nine month of 2021. spent over$44 billion in stock buybacks, and shareholder payouts The 18 largest oil and natural gas CEOs are also in the mix. are collectively worthAccording to BailoutWatch, Friends of the Earth and Friends of the Earth, $8 billion is more than they were in January 2021.

From a climate perspective, this bill is “one piece of the puzzle,” Henn said. Next steps could include removing Oil and gas subsidiesWorking towards it A managed declinean amendment to this bill could also be proposed. direct fundingLow income energy assistance or energy retrofit programs.

Managing Big Oil’s decline would not only be beneficial for the climate, it would also prevent oil and gas companies from fleecing customers like they are now. “We’re not going to be able to make this transition [away from fossil fuels] if we fool ourselves into thinking that oil and gas companies are gonna come along and witness – they’re gonna fight this tooth and nail all the way, just as they fought it for decades,” Henn said.

“The leadership of these companies is committed to a business plan which is going to destroy life as we know it and continue to fuel dictators like [Vladimir] Putin along the way,” Henn continued. “And so I think the question is, ‘what are the smart common sense regulations we can put into place that rein this industry in?’”