With crude oil prices surging and oil companies continuing to profit while Americans are struggling at the pump, lawmakers in the U.S. are proposing windfall profit taxes on Big Oil.
Windfall profit taxes have been implemented in the past, but this time around, the idea doesn't seem to have support across the aisle as it once did.
If the taxes are put in place, they could provide direct financial assistance to consumers reaching the bottom of their wallets for energy costs.
A windfall profit tax is a tax that a government levies against certain industries when economic conditions allow "those industries to experience above-average profits," according to Investopedia.
In 2021, big oil companies raked in the money, with ExxonMobil posting a $23 billion profit, the largest the company has had in seven years, and BP earning $12.8 billion in 2021.
Both are also forecasted to see those numbers rise, with ExxonMobil projected to make almost $33 billion this year and BP $15.6 billion.
The tax has the support of Democratic lawmakers who are arguing that it is only fair as people struggle to fill their cars with gas or heat their homes, CNN reported.
Among those supporting the idea is Senator Elizabeth Warren, one of the 12 co-sponsors on the measure in the Senate.
"We need to curb profiteering by Big Oil and provide relief to Americans at the gas pump — that starts with ensuring these corporations pay a price when they price gouge," Warren said, CNN reported.
The bill, sponsored by Warren, would tax profits of Big Oil companies made on crude prices above recent historical levels and pay hundreds of dollars annually to low-to middle-income taxpayers.
As for the magic number crude oil needs to hit, the tax would only be implemented if average oil prices hit $120 a barrel. As of Friday, Brent oil closed at just under $108.
On top of oil not being near the price being proposed, the legislation has not yet passed, and it does not appear to have the support of the needed votes to pass it. The Biden administration has also not shared support for the proposal.
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