Sen. Ron Wyden, D-Ore., wants to accentuate the tax burden of oil and gas companies raking in more than $1 billion per year.
Perhaps even double it.
For the Taxing Big Oil Profits Act, Wyden’s legislation would call for a 21% tax on the “excess profits” of oil and gas companies eclipsing the $1 billion threshold of earnings.
The definition of “excess profits,” from Wyden’s perspective: current profits minus a standard 10% return on investment.
As a secondary part of Wyden’s bill, a 25% excise tax would be assessed on all corporate stock repurchased by the oil and gas companies.
The rationale behind this component: Exxon Mobil’s recent announcement that it plans to buy back roughly $30 billion of company stock in 2023. The same goes for Chevron, which will rebuy $10 billion worth of its own stock by the end of this year.
“Our broken tax code is working for Big Oil, not American families. While Americans pay more to fill up their gas tanks, Big Oil companies are raking in record profits, rewarding their CEOs and wealthy shareholders with massive stock buybacks, and using special loopholes in the tax code to pay next to nothing in taxes,” said Wyden, chairman of the Senate Finance Committee.
Oil companies have the capacity to pay lower taxes than most corporations, given the various deferment programs.
For example, the 2017 Tax Cuts and Jobs Act from the Trump presidency “helped oil companies further by reducing the effective tax rate for companies to 21% from 35%.”
For the second quarter of 2022, Exxon Mobil reported a profit of $17.85 billion, and Chevron took in a record $11.62 billion. Also, according to Deseret.com, Shell brought in $11.5 billion for the same time period; and BP (formerly British Petroleum) collected $8.45 for Q2.
Wyden might have been taking a cue from President Joe Biden. Last month, while facing backlash for rising gas prices in America, the president derisively said that “Exxon made more money than God this year.”
Wyden’s proposed legislation has the backing of 12 other senators — all Democrats:
Senate Majority Leader Charles Schumer of New York, along with Sens. Richard Blumenthal of Connecticut, Bob Casey of Pennsylvania. Dianne Feinstein of California, Maizie Hirono of Hawaii, Amy Klobuchar of Minnesota, Patty Murray of Washington, Alex Padilla of California, Jack Reed of Rhode Island, Debbie Stabenow of Michigan, Chris Van Hollen of Maryland and Raphael Warnock of Georgia.
The congressional Democrats attempted to push a similar bill through the House chamber earlier this year, coinciding with U.S. consumers paying record-high prices for gasoline.
Wyden’s Senate bill, however, would be tied to oil/gas profits, instead of the market price for oil.
Wyden, who is seeking another term, faces challengers including Republican Joe Rae Perkins in the Nov. 8 general election.
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