- Democrats rolled out a plan to issue quarterly checks to Americans paid for with big oil profits.
- "The bigger thing is that it's going to save everyone money," Rep. Ro Khanna said in an interview.
- The proposal faces steep odds for passage given GOP resistance.
Democrats introduced a bill on Thursday to tax the largest oil companies recording their biggest profits in years — and use the money to provide quarterly checks to Americans facing sticker-shock just about everywhere they look.
The legislation would apply only to large firms like ExxonMobil that produce or import over 300,000 oil barrels per day and exempt smaller companies. The 50% tax would be imposed on the difference between the current price of a barrel and the average price between 2015 to 2019.
Rep. Ro Khanna of California and Sen. Sheldon Whitehouse of Rhode Island are the bill's main sponsors. Other co-sponsors includes Sens. Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts, Michael Bennet of Colorado, and Sherrod Brown of Ohio among others.
The plan would also establish 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 filers making under $75,000 for individuals and $150,000 for couples would receive the payments. At $120 per barrel, single-filers would receive $240 a year and joint-filers would get $360.
"The bigger thing is that it's going to save everyone money," Khanna said in an interview. "If you're big oil and you look at this, you're not going to want to pay this tax and so you're going to be willing to lower prices."
The plan faces long odds to become law. Republicans are opposed to tax hikes and centrist Democrats may balk at the measure as well.
Energy prices are spiking in the aftermath of the Russian invasion of Ukraine due to traders shunning Russian oil, effectively cutting out one of the world's biggest oil producers from global markets. Oil firms like ExxonMobil are enjoying their biggest profits in years, the result of rising energy prices.
The cost of gasoline reached $4.31 per gallon on Thursday, according to AAA. It's likely to creep up further with the US imposing a ban on all Russian energy imports to punish Russian President Vladimir Putin.
"This is a step that we're taking to inflict further pain on Putin, but there will be costs as well here in the United States," President Joe Biden said Tuesday.
But Americans are seeing prices surge across the board, not just when they refill their gas tanks. The Bureau of Labor Statistics released a report Thursday showing prices rose 7.9% compared to a year ago, particularly for furniture, chicken, new cars, and steak. Inflation accelerated to its fastest pace in four decades, Insider's Ben Winck and Madison Hoff reported.
Democrats are eyeing ways to cut costs for families by establishing affordable childcare and reining in prescription drug costs among other new domestic programs. Yet the bulk of their economic agenda is stalled because of resistance from Republicans and Sen. Joe Manchin of West Virginia, a Democratic holdout.
In the short-run, Democrats floated suspending the federal gas tax to provide some help at the pump. But that seems unlikely to overcome strong Republican resistance as well.