February 1, 2023

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Biden Administration Considers A Windfall Tax On Oil And Gas Profits

2 min read

The Biden administration is considering a proposal to tax oil and gas windfall profits to provide a gas subsidy for American consumers struggling with high energy prices, said Bharat Ramamurti, deputy director of the National Economic Council at a panel sponsored by the Roosevelt Institute think tank on June 2.

The news follows a similar move in the U.K. by Chancellor Rishi Sunak on May 26, to impose a 25 percent windfall tax on North Sea energy producers to provide a 15 billion pound ($18.9 billion) energy fund subsidy for Britons paying for soaring fuel costs.

The White House has been examining proposals from Congress that would hike taxes on energy producers in order to provide a subsidy or tax rebate to households.

“We are very much open to any proposal that would provide relief to consumers at the pump,” said Ramamurti.

“There are a variety of interesting proposals and design choices on a windfall profits tax. We’ve looked carefully at each of them and are engaging in conversations with Congress about design.”

The proposal, backed by 15 Democrats in the Senate and the House, would impose a new quarterly tax on American oil companies for crude produced domestically or imported from abroad.

The revenue would be siphoned off to consumers below a certain income in the form of a tax rebate that would amount to a few hundred dollars per year, but the bill does not appear so far to have support in Congress.

The bill is being sponsored by Sen. Elizabeth Warren (D-Mass.), who announced on MSNBC in March, “I’m co-sponsoring … a bill on windfall profits tax. We get it, supply and demand, prices go up, but profit margins should not go up, that’s just oil companies gouging.

“Big oil companies are making higher profits off Putin’s war,” tweeted Warren.

The “windfall tax on oil would guarantee $200 oil,” responded Dan Rosenblum, a financial analyst at Sharkbiotech.com, in a tweet, explaining that a tax on gas producer profits would cause U.S. fuel…

2022-06-04 15:00:00

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