Democratic Sens. Elizabeth Warren and Sheldon Whitehouse are working on a proposal to tax oil industry profits and distribute them to Americans, Bloomberg reports.
Oil companies have seen massive profits as gas prices hit record highs amid Russia’s invasion of Ukraine.
“Big Oil’s first priority is to maximize profits,” Warren wrote on Twitter. “We can’t let them use Putin’s invasion as an excuse to pad their bottom line with war-fueled profits. So I’m working with Senate Democrats on a windfall-profits tax.”
The plan would require oil companies that produce or import more than 300,000 barrels of oil per day to pay a tax on every barrel equal to 50% of the difference between the current price and the average price between 2015 and 2019, when energy companies posted record profits. Smaller oil companies would be exempt.
The revenues would be sent in quarterly payments to individuals earning up to $75,000 or couples making up to $150,000 per year. A single filer would get approximately $240 per year and couples would get about $360.
The plan is expected to quickly run into opposition from Republicans, many of whom have pledged to vote against any new taxes.
But the proposal could also run into opposition from West Virginia Sen. Joe Manchin, who has opposed numerous Democratic spending proposals and has sought to heavily guard the energy industry in his state.
Democrats have previously floated similar proposals.
One proposal called for minimum corporate tax rates and stricter offshore tax rules targeting specific industries.
Democrats have also proposed eliminating all tax breaks used by fossil-fuel companies.
Big oil reaps profits after pandemic losses:
Gas prices have risen dramatically since Russia’s invasion of Ukraine but several big oil companies, including Exxon, Chevron, BP, and Shell reported record-breaking profits even before the invasion.
But these profits also came after losses during the pandemic. Exxon Mobil, which earned $23 billion in profits in 2021, reported $22.4 billion in losses the previous year. Chevron reported a $15 billion revenue in 2021 after losing $5.5 billion in 2020. BP lost $5.7 billion that.