Biden opens the door to a tax on the extraordinary profit of oil companies

The president of the United States, Joe Biden, raised this Monday the possibility that the oil companies pay a special tax for the so-called benefits that fell from the sky that they are registering with the increase in crude oil prices, as long as they do not increase domestic production to try lower prices at the pumps.

Thomas Osborne
Thomas Osborne
01 November 2022 Tuesday 04:43
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Biden opens the door to a tax on the extraordinary profit of oil companies

The president of the United States, Joe Biden, raised this Monday the possibility that the oil companies pay a special tax for the so-called benefits that fell from the sky that they are registering with the increase in crude oil prices, as long as they do not increase domestic production to try lower prices at the pumps. The proposal has already been put on the table of the legislators of Congress, although it has a difficult path.

"The oil industry has not fulfilled its responsibility to invest in the United States and support the American people. If they do not, they will have to pay a higher tax on their excess profits and face other restrictions," said the president in a speech from the White House.

Biden framed the measure in a context of record profits for the country's main oil companies as a result of the Russian invasion of Ukraine, which has disrupted the international energy market. The big six - ExxonMobil, Chevron, Shell, BP, ConocoPhillips and TotalEnergy - have announced profits of 100,000 million in the last six months, more than in all of last year. At the same time, they have invested $80 billion in their business, according to Bloomberg.

The Democrat affirms that by not increasing its refining or investment capacity, the benefits are not due to any innovation, but to the tragic situation of the war. "I am a capitalist, I have no problem with companies getting a fair return on their investment and innovation, but that is not even remotely what is happening," he assured.

Biden said he will do his best to set the rate. But such a proposal is unlikely to pass the current Senate, an essential step, as it is evenly divided between Democrats and Republicans. Unless Biden's party makes unexpected gains in next week's election, the GOP and centrist Democrats will be able to block it.

The measure is similar to the one that has been proposed in Spain, with an extraordinary tax on electricity and energy.