DeFazio: Windfall tax on oil companies

By Congressman Peter DeFazio
Press Release,

Legislation comes following report from anti-corruption watchdog group that shows largest oil and gas companies made an eye-popping $205 billion in 2021

Congressman Peter DeFazio (OR-04) introduced the Stop Gas Price Gouging Tax and Rebate Act. This legislation would create a windfall profit tax on excessive corporate profits and return the revenue to American consumers in the form of a tax rebate.

“Big Oil is foaming at the mouth,” said Rep. DeFazio. “After price-gouging Americans in 2021 to make record profits, Big Oil is now reaping the benefits of Putin’s price hike. As we face COVID-related supply chain bottlenecks and uncertainty created by Vladimir Putin’s unprovoked invasion of Ukraine, I repeat to Big Oil what President Biden said just a week ago – it’s no time for profiteering or price-gouging. This is why I’ve introduced the Stop Gas Price Gouging Tax and Rebate Act. My legislation would tax Big Oil’s excess profits in 2022 and return the revenue back to Americans. It’s beyond time to put people over profits – period.”

As gas prices soared in 2021, the largest oil and gas companies made a combined $205 billion in record profits in 2021, according to a report released today by Accountable.US. Exxon Mobil, the largest oil and gas company in the U.S., reported over $23 billion in profit in 2021 alone, which was a 60 percent increase compared to its 2019 profit of $14 billion.

Big Oil has used its excess billions in profit to shower CEOs and shareholders with cash, instead of providing lower gas prices to Americans, all while refusing to increase production to help reduce gas costs. As a result, Americans are continuing to face record-level prices at the gas pump.

Another recent report by Accountable.US asserts that Big Oil is “taking advantage of bloated prices, fleecing Americans along the way.” According to data from Bernstein Research, the seven major oil companies are on track to return at least $38 billion to shareholders via stock buyback programs this year. Big Oil companies are poised to continue exploiting this moment to maximize their profits in 2022.

The Stop Gas Price Gouging Tax and Rebate Act would:

1. Create an income-based windfall profit tax on excessive corporate profits

Big Oil will pay a one-time, 50 percent windfall profit tax on any adjusted taxable income (ATI) in 2022 that exceeds 110 percent of their average ATI during pre-pandemic levels between 2015-2019.

2. Lower energy prices for Americans with a tax rebate

Revenue raised by the windfall profit tax will be returned to consumers as a monthly, advanced, and refundable tax credit that will be phased out by income. Eligibility is identical to criteria used for economic impact (“stimulus”) payments that were included in the American Rescue Plan (ARP).

In addition to Congressman DeFazio, the bill is cosponsored by U.S. Representatives Nanette Barragán, Andre Carson, Steve Cohen, Jesús “Chuy” Garcia, Raúl Grijalva, Pramila Jayapal, Mondaire Jones, Marcy Kaptur, Tom Malinowski, Chellie Pingree, Katie Porter, Deborah Ross, Mark Takano, Dina Titus, Rashida Tlaib, Lauren Underwood, and Peter Welch.

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