Democrats introduced a bicameral bill on Thursday that would levy a tax on oil and gas companies and redistribute the money to the public, who is currently facing the highest gas prices ever seen in the United States, according to AAA.
The Big Oil Windfall Profits Act, introduced by Rep. Ro Khanna (D-California) and Sen. Sheldon Whitehouse (D-Rhode Island), would levy a tax on every barrel produced or imported by big oil companies.
Barrels would be subject to a 50% tax on the difference between the current price and the average price per barrel between 2015 and 2019. Only large companies like Exxon Mobil and Chevron would be subject to the tax, discouraging major oil companies from maintaining the costs. high without risking losing market share.
Under the bill, consumers would receive a quarterly rebate on income generated by the tax, with checks being phased out for individuals who earn more than $75,000 a year and couples who earn more than $150,000. Single filers would get about $240 a year, while joint filers would get about $360 a year, lawmakers estimate, with the tax bringing in a total of about $45 billion a year.
“We have seen this scenario before, and we cannot allow the fossil fuel industry to once again reap a massive windfall by taking advantage of an international crisis,” Whitehouse said in a statement. “In the longer term, accelerating the transition to renewable energy will reduce energy costs, protect consumers from price spikes and reduce Western countries’ dependence on foreign despots and greedy corporations. of fossil fuels.
The bill is co-sponsored by 11 senators, including Senators Bernie Sanders (I-Vermont), Elizabeth Warren (D-Massachusetts) and Ed Markey (D-Massachusetts). The proposal comes as oil companies come under increasing scrutiny for take advantage of inflation and the instability caused by the Russian invasion of Ukraine to raise pump prices and fetch record prices.
Climate advocates hailed the bill, saying it was a step forward in curbing oil and gas company greed. Although this bill has no direct effect on gas prices, which are largely decided by the intergovernmental oil organization OPECthis could deter the oil industry from investing in share buybacks and dividends, which it has done in spades as their profits grew.
The proposal could push companies to invest in measures that would stabilize energy supplies while providing much-needed relief to the public, said Jamie Henn, director of Fossil Free Media. The shareholders were put pressure on companies drive up stock prices at the expense of the public.
“If you’re looking to drive up the price of a stock, you want to drive up the price of oil, basically,” Henn said. Truth. Instead of increasing production in response to inflation linked to the pandemic and the Russian invasion, the oil companies decided: “let’s use this money to reward our shareholders and try to inflate our share price”, a said Henn.
Indeed, oil and gas companies are currently raking in profits and generously rewarding their shareholders and CEOs. A report from Accountable.US in december found that the top 24 oil and gas companies made $174 billion in profits in the first nine months of 2021, and spent more $44 billion in stock buybacks and shareholder payouts. Meanwhile, the 18 biggest oil and gas CEOs collectively worth $8 billion more than in January 2021, according to BailoutWatch and Friends of the Earth.
From a climate perspective, this bill is “one piece of the puzzle,” Henn said. Next steps could include withdrawing oil and gas subsidies and working towards a controlled decline the fossil fuel industry; an amended version of this bill could also direct funding energy renovation programs or energy assistance for low-income people.
Managing Big Oil’s decline would not only be good for the climate, it would also prevent oil and gas companies from gouging customers as they are doing now. “We are not going to be able to make this transition [away from fossil fuels] if we are wrong in thinking the oil and gas companies are going to come and testify – they are going to fight tooth and nail to the bitter end, just like they have fought for decades,” Henn said.
“The management of these corporations are committed to a business plan that will 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 some smart, common-sense regulations that we can put in place to curb this industry? “”