Rep. Ro Khanna from California. Photo by AP/Andrew Harnick
The Democrats introduced a plan to issue quarterly checks to Americans paid for by large oil revenues.
“Most of all, it will save everyone money,” Rep. Ro Khanna said in an interview.
The proposal faces greater chances of passage, given the resistance of the Republican Party.
Democrats introduced a bill on Thursday to tax the biggest oil companies, the biggest profit-makers in years, and are using the money to provide quarterly checks to Americans facing sticker shock almost everywhere they look.
The law will only apply to large firms such as ExxonMobil that produce or import more than 300,000 barrels of oil per day and exempt smaller companies. A tax of 50% will be levied on the difference between the current price of a barrel and the average price between 2015 and 2019.
Rep. Ro Hannah of California and Senator Sheldon Whitehouse of Rhode Island are the main sponsors of the bill. Other co-founders include Senators Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts, Michael Bennet of Colorado, and Sherrod Brown of Ohio.
The plan also includes a quarterly payment program to provide direct payments to Americans struggling with rising prices. The income thresholds were similar to the third stimulus check issued last year: tax declarers earning less than $75,000 for individuals and $150,000 for couples will receive the payout. At $120 per barrel, single-feed players will receive $240 per year, while joint players will receive $360.
“Most of all, it will save everyone money,” Khanna said in an interview. “If you’re a big oil company and you look at this, you don’t want to pay this tax, and so you’ll be willing to cut prices.”
The plan faces great chances of becoming law. Republicans oppose tax hikes, and centrist Democrats may also opt out of the measure. A spokesman for Senator Joe Manchin’s office did not immediately respond to a request for comment.
Energy prices have skyrocketed since the Russian invasion of Ukraine as traders shun Russian oil, cutting off one of the world’s largest oil producers from world markets. Rising prices prompted firms such as ExxonMobil and Chevron to report their biggest profits in years even before the Kremlin launched its military campaign.
The story goes on
The price of gasoline hit $4.31 a gallon on Thursday, according to the AAA. The situation is likely to get even worse when the US imposes a ban on all energy imports from Russia as a punishment for Russian President Vladimir Putin.
“This is a move we are taking to hurt Putin even more, but here in the United States, it will come at a cost,” President Joe Biden said Tuesday.
But Americans are seeing price increases everywhere, not just when they fill up their gas tanks. The Bureau of Labor Statistics released a report on Thursday showing prices rose 7.9% from a year ago. especially on furniture, chicken, new cars and steak. Inflation has accelerated to its fastest pace in four decades, Insider’s Ben Wink and Madison Hoff said.
Democrats are looking for ways to cut costs for families by establishing affordable childcare and curbing prescription drug spending, among other new domestic programs. However, much of their economic agenda has stalled due to resistance from Republicans and anti-Democrat Manchin.
In the short term, Democrats have proposed suspending the 18.4-cent-per-gallon federal gas tax to provide some relief at the gas station. But it is also unlikely to help overcome the strong resistance of the Republicans.
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