'Corporate greed is destroying this economy': Sanders pushes for windfall profits tax

'Corporate greed is destroying this economy': Sanders pushes for windfall profits tax
Bernie Sanders/Shutterstock
Bernie Sanders/Shutterstock
Economy

Sen. Bernie Sanders on Thursday slammed oil companies for raking in huge profits on the backs of U.S. consumers and reiterated his case for a windfall tax, a demand that came as President Joe Biden's call for a federal gas tax holiday faced growing pushback from progressives and top officials in his own administration.

"Corporate greed is destroying this economy. Right now, people all over the country are paying $5, $6 for a gallon of gas," said Sanders (I-Vt.), the chair of the Senate Budget Committee. "Meanwhile, in the first quarter of this year, oil company profits were $93 billion, and they're going to spend $88 billion on dividends and stock buybacks for their wealthy stockholders."

"This is outrageous," he added. "Corporate profits soar, working people can't afford to fill up their gas tank. We need to pass a windfall profits tax now."

In March, Sanders led the introduction of a bill that would impose a 95% tax on the windfall profits of major companies, including oil giants that are taking advantage of Russia's war on Ukraine to hike prices and pad their bottom lines, helping to push inflation to a four-decade high. The Vermont senator has also signed onto a separate measure that would specifically target Big Oil with a new tax and use the resulting revenue to pay out quarterly rebates to U.S. households.

Price increases in the U.S. have only accelerated Sanders unveiled his legislation, with the average cost of a gallon of gas reaching an unprecedented level earlier this month as oil majors such as Chevron and ExxonMobil tout their surging profits.

"Gas is over $5 a gallon," Sanders noted Thursday. "Why? Well, oil companies made $93 billion in profits in the first quarter and are spending $88 billion on stock buybacks and dividends to enrich their wealthy stockholders. Yes, it's time for a windfall profits tax now."

Under mounting pressure to boldly confront corporate profiteering to rein in prices, Biden earlier this week pushed Congress to enact a three-month suspension of the federal gas tax of 18.3 cents per gallon and the diesel tax of 24.3 cents per gallon—a plan that, like the windfall profits tax, faces long odds in the Senate thanks in part to fossil fuel industry ally Sen. Joe Manchin (D-W.Va.).

The president's call for a gas tax holiday was immediately met with criticism from Democratic lawmakers and even top administration officials who—according to the Washington Post—"said privately that it would probably do little to significantly lower gas prices."

"I fully understand that a gas tax holiday alone is not going to fix the problem," Biden acknowledged Wednesday. "But it will provide families some immediate relief, just a little bit of breathing room, as we continue working to bring down prices for the long haul."

But leading Democratic lawmakers, including Congressional Progressive Caucus Chair Rep. Pramila Jayapal (D-Wash.), countered that a "gas tax holiday won't make it down to consumers or stop the profiteering of oil and gas companies."

"It also robs the Highway Trust Fund of necessary infrastructure funds," Jayapal added. "An excess profits tax on oil companies with a rebate to consumers is a better solution."

Sanders, too, has rejected the idea of a gas tax holiday, expressing agreement with former President Barack Obama that the proposal is a mere "gimmick."

"Barack Obama was right," Sanders said in March. "A gas tax holiday was a bad idea in 2008 and it's a bad idea today. If we're serious about providing consumers relief at the gas pump, let's take on the greed of Big Oil by enacting a windfall profits tax and ending OPEC's illegal price-fixing cartel."

While Senate passage of a windfall profits tax is unlikely due to opposition from Manchin and the entire Republican caucus, the proposal is overwhelmingly popular with U.S. voters—which proponents say makes it both better policy and better politics than a gas tax holiday ahead of the November midterms.

One recent poll showed that 80% of U.S. voters, including 73% of Republicans, back the idea of "placing a windfall profits tax on the extra profits oil companies are making from the higher gasoline prices they are charging because of the Russia-Ukraine situation."

"We need to get gas prices under control, but a gas tax holiday is not the answer," Rep. Jared Huffman (D-Calif.) tweeted Thursday. "We can't trust oil execs to pass the savings on to consumers—rebates and windfall taxes would be far more meaningful and wouldn't rob infrastructure funds."

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