Democrats introduced a bill Thursday to tax the biggest oil companies posting their biggest profits in years and use the money to provide quarterly checks to Americans facing sticker shock just about everywhere they look.
The legislation would only apply to large companies like ExxonMobil that produce or import more than 300,000 barrels of oil a day and would exempt smaller companies. The 50% tax would be imposed on the difference between the current price per barrel and the average price between 2015 and 2019.
Representative Ro Khanna of California and Senator Sheldon Whitehouse of Rhode Island are the primary sponsors of the bill. Other co-sponsors include Sens. Bernie Sanders from Vermont, Elizabeth Warren from Massachusetts, Michael Bennet from Colorado and Sherrod Brown from Ohio, among others.
The plan would also establish a quarterly payment program to provide direct payments to Americans struggling with rising prices. The income thresholds were similar to those for the third stimulus check issued last year: Filers earning less than $75,000 for individuals and $150,000 for couples would receive the payments. At $120 per barrel, single filers would receive $240 per year and joint filers would receive $360.
“The most important thing is that it’s going to save everyone money,” Khanna said in an interview. “If you’re a big tanker and you look at that, you won’t want to pay that tax, so you’ll be willing to lower prices.”
The plan faces a long chance of becoming law. Republicans are opposed to tax increases and centrist Democrats may also oppose this measure. A spokesperson for Sen. Joe Manchin’s office did not immediately respond to a request for comment.
Energy prices are rising in the wake of Russia’s invasion of Ukraine as traders shun Russian oil, excluding one of the world’s largest oil producers from global markets. Rising prices have prompted companies like ExxonMobil and Chevron for report their biggest profits years before the Kremlin even embarked on its military campaign.
The cost of gasoline hit $4.31 a gallon on Thursday, according to AAA. It is likely that climb further the United States imposing a ban on all Russian energy imports to punish Russian President Vladimir Putin.
“It’s a step we’re taking to inflict more pain on Putin, but there will also be costs here in the United States,” President Joe Biden said Tuesday.
Democrats are ways to watch reducing costs for families by implementing affordable child care and limiting prescription drug costs among other new national programs. Yet most of their economic agenda has stalled due to resistance from Republicans and Democratic resister Manchin.
In the short term, Democrats floated by suspending the federal gasoline tax of 18.4 cents a gallon to help at the pump. But that seems unlikely to overcome strong Republican resistance as well.