As the five largest publicly traded oil companies boast to Wall Street about their record $264.3 billion haul in 2022, U.S. Senator Sheldon Whitehouse (D-RI) today led his Democratic colleagues in reintroducing the Big Oil Windfall Profits Tax Act to crack down on profiteering by Big Oil and return the industry’s excessive gains to working people.
“Big Oil’s obscene profits last year are the spoils of war and cartel pricing. Clawing back Big Oil’s windfall and returning it to the American families who paid for it at the pump is good policy that will help deter future price gouging,” said Whitehouse, Chairman of the Senate Budget Committee and a senior member of Senate Environment and Public Works Committee. “Congress should heed the President’s call, ignore the fossil fuel industry’s lies, and deliver this needed relief for the American people.”
Congressman Ro Khanna (D-CA) introduced the legislation in the House.
“Big Oil continues to rake in record profits in the midst of an ongoing energy crisis and is using the money to enrich their own shareholders while average Americans are hurting at the pump,” said Khanna. “I’m glad to introduce this legislation with Senator Whitehouse to hold Big Oil accountable for high gas prices and put that money back in the pockets of Americans.”
The five largest publicly traded oil companies – Exxon Mobil, Chevron, BP, Shell, and TotalEnergies – hauled in pre-tax profits totaling $264.3 billion in fiscal year 2022. Exxon alone reported $77.8 billion in profits in 2022, smashing the earnings record of any American or European oil company. Exxon also announced plans to keep oil production flat for the year ahead. Rival oil giant Chevron – flush with $49.7 billion in profits – greenlit $75 billion in stock buybacks in 2023 to benefit its wealthy executives and shareholders on Wall Street.
Last year, gas prices briefly surpassed $5 a gallon, squeezing the budgets of families in Rhode Island and across the country. While the price of gas has fallen significantly since then, it remains well above pre-pandemic levels.
The Big Oil Windfall Profits Tax Act would:
- Claw back Big Oil’s windfall profits. Large oil companies will owe a per-barrel quarterly tax equal to 50 percent of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel between 2015 and 2019. It will apply to both domestically produced and imported barrels of oil to ensure a level playing field. The clawback will apply to oil profits in 2022 and going forward so that Americans gouged by high prices are made whole.
- Apply only to the largest companies. Large companies that produce or import at least 300,000 barrels of oil per day will be subject to the legislation. Smaller companies accounting for roughly 70 percent of domestic production will be exempt, so oil giants like Exxon and Chevron cannot simply gouge consumers further without the threat of losing market share.
- Lower consumer costs with relief rebates. Revenue raised from the windfall profits of big oil companies will be returned to consumers in the form of a quarterly rebate, which would phase out for single filers who earn more than $75,000 in annual income and joint filers who earn more than $150,000. With oil priced at roughly $90-100 per barrel, this levy would raise approximately $48.1 billion per year. At this price, single filers would receive an estimated $255 each year and joint filers $382.
Whitehouse first introduced the Big Oil Windfall Profits Tax in March 2022 as Big Oil jacked up gas prices against a backdrop of the Russian invasion of Ukraine. While the bill stalled in the 117th Congress at the hands of fossil-fuel-funded Republicans, Conservative Party leaders in the United Kingdom enacted an excess profits tax on oil companies. Last October, President Biden delivered remarks lambasting the fossil fuel industry’s price gouging at the pump and floated a higher tax on windfall profits. President Biden again targeted Big Oil’s record profits in his State of the Union address last week.
The Senate legislation is cosponsored by Senators Alex Padilla (D-CA), Jeff Merkley (D-OR), Sherrod Brown (D-OH), Bob Casey (D-PA), Elizabeth Warren (D-MA), Edward Markey (D-MA), Richard Blumenthal (D-CT), Michael Bennet (D-CO), Chris Murphy (D-CT), Tim Kaine (D-VA), Raphael Warnock (D-GA), Tammy Baldwin (D-WI), Cory Booker (D-NJ), Debbie Stabenow (D-MI), Bernie Sanders (I-VT), and Jack Reed (D-RI).
Like Newport Buzz? We depend on the generosity of readers like you who support us, to help with our mission to keep you informed and entertained with local, independent news and content. We truly appreciate your trust and support!
