Economy Kenny Stancil

Progressives Say Windfall Profits Tax a ‘Better Solution’ Than Biden’s Gas Tax Holiday

"A windfall tax would get more relief to more people by penalizing the Big Oil profiteering that's driving up prices," said one campaigner.
[dextroannie / CC BY 2.0]

By Kenny Stancil | Common Dreams

As President Joe Biden on Wednesday prepares to urge Congress to temporarily suspend federal gasoline and diesel taxes in a bid to ease pain at the pump, progressives are calling instead for the passage of Democratic lawmakers’ overwhelmingly popular bill to impose a windfall profits tax on Big Oil.

“Congress should take the president’s call and answer it with the windfall profits tax legislation already proposed in the House and Senate,” Jamie Henn, a spokesperson for the Stop the Oil Profiteering (STOP) campaign, wrote on social media. “A windfall tax would get more relief to more people by penalizing the Big Oil profiteering that’s driving up prices.”

Henn’s message was echoed by former Ohio state Sen. Nina Turner, who said that “these fossil fuel companies need to give back the money they’ve taken out of the pockets of hardworking Americans.”

During a Wednesday afternoon speech, Biden is expected to ask congressional lawmakers to lift federal taxes—18.4¢ per gallon for gas and 24.4¢ per gallon for diesel—through the end of September.

Biden is also expected to ask states to pause local fuel taxes and urge oil refineries to increase capacity.

The nationwide average for a gallon of gas is $4.96 as of Wednesday, but according to unnamed Biden administration officials who briefed CNN, prices could decrease by roughly $1 per gallon if all measures proposed by the White House are implemented.

Given widespread Republican opposition in the evenly split Senate, where the anti-democratic filibuster rule requires 60 votes to advance most legislation, Biden’s call for a gas tax holiday faces long odds.

Meanwhile, several economic analysts and even members of the president’s own party, including House Speaker Nancy Pelosi (D-Calif.), have questioned the effectiveness of such a policy.

According to Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, and other critics, a three-month gas tax holiday would do little to help consumers while taking away an estimated $10 billion in revenue used to fund highway repair, mass transit, and environmental remediation.

“I’m shaking my head,” Rep. Jared Huffman (D-Calif.) told Politico Wednesday. “Oil companies and gas stations will pocket most of the money and won’t even send President Biden a thank you card. Consumers will get no meaningful relief from this, it will just starve our highway trust fund of revenues. I had hoped better ideas would prevail—like consumer rebates or vouchers for free public transit.”

“Exactly,” Henn tweeted in response to Huffman’s comments, stressing that a Big Oil windfall profits tax is “better policy and better politics.”

Since consumer demand returned following a short coronavirus-driven decline in 2020, investors have pressured oil corporations to suppress production to push prices higher. Last year, as average gas prices in the U.S. steadily climbed—reaching about $3.40 per gallon in December 2021, up from $2.10 a year before—25 of the world’s biggest fossil fuel giants enjoyed a record $205 billion in profits and rewarded their shareholders with billions of dollars worth of stock buybacks and dividend bumps.

Oil and gas companies have hiked prices even further in 2022—especially after Biden’s early March announcement of a U.S. ban on imports of Russian fossil fuels. Accusations of war profiteering have grown since petroleum executives in April boasted about their “best quarter ever.”

A report published last month by the watchdog group Accountable.US found that “in the first three months of the year, 21 oil and gas companies made over $41 billion in profits, more than doubling profits from just a year ago. This is, on average, $1.2 billion more per company than the same time last year thanks to—as the companies themselves say—high oil prices and the crisis in Ukraine.”

Despite being brought to Capitol Hill to testify before Congress about skyrocketing gas prices, U.S. fossil fuel executives—projected to reap up to $126 billion in extra profits this year—have not shied away from discussing their intention to capitalize on the war in Ukraine.

In an effort to crack down on what progressive lawmakers have denounced as “shameless” price gouging by fossil fuel corporations, congressional Democrats led by Rep. Ro Khanna (Calif.) and Sen. Sheldon Whitehouse (R.I.) introduced the bicameral Big Oil Windfall Profits Tax in March.

According to survey data released just days after the legislation was unveiled, 80% of U.S. voters—including 73% of Republicans—support the measure, which would hit large fossil fuel companies with a per-barrel tax equal to 50% of the difference between the current price of a barrel of oil and the average price per barrel between 2015 and 2019. An estimated $45 billion in annual revenue would be redistributed to U.S. households in the form of quarterly rebates.

Dozens of progressive advocacy groups and lawmakers have been urging Pelosi and Senate Majority Leader Chuck Schumer (D-N.Y.) to support the Big Oil Windfall Profits Tax, which Sen. Elizabeth Warren (D-Mass.) has said can help Democrats avert “big losses” in November’s pivotal midterms.

Khanna, who said last week that he was “encouraged” by Biden’s letter criticizing oil executives for restricting supply, made the case for why a windfall profits tax—which the White House recently started talking with congressional lawmakers about—is superior to a gas tax holiday.

“The problem with repealing an 18¢ gas tax,” Khanna tweeted Wednesday, “is it feeds into a far-right narrative that the problem is government, not Big Oil gouging consumers.”

“Let’s pass [our] windfall profits tax instead to tax huge oil profits and put money back into the pockets of Americans,” he added.

However, Khanna and Whitehouse’s proposal faces an uphill battle considering the GOP’s desire to take advantage of voters’ mounting anger at the state of the economy. Not only is it unlikely that at least 10 Senate Republicans would support advancing debate on the bill, as required due to the filibuster, but questions remain about whether corporate Democratic Sen. Joe Manchin (W.Va.) would vote for it.


  1. A windfall profits tax would be offensive to the corporate donors of both of our major political Parties. Who thinks our political rulers would even consider such a tax on any business interest they represent?

  2. This is merely a rhetorical flourish as something to point to over fear of midterms. There’s still no incentive for corps not to continue to go as far as traffic will bear.

  3. no intelligent observer believes CD fake news—dims more ruling class than GOP…the fake gibberish about windfall profits tax will not be supported by dems or GOP—yet they all support sanctions vs Russia, the actual cause of inflated energy food in USA and NATO nations—a recession worse than 2008 is near….sanctions only improved Russian economy—rouble stronger than ever; export revenue greater today than anytime in history

  4. Windfall Profits Tax? Why now? Should this option not have been considered long before now for other “egregious” profiteering? The pharma industry comes to mind.

  5. First and foremost, the more gasoline costs, the better. Driving is extremely environmentally destructive, and higher gas prices causes people to drive less and some to even give up their cars.

    As to a windfall profits tax, that would be infinitely better than eliminating the federal gas tax, but it’s not a solution to higher gas prices. (BTW, Americans pay lower gas prices than the remainder of people in the developed world.) The higher prices are caused by a lack of supply, again a good thing environmentally. A windfall profits tax would merely cause oil companies to pay some tax, and would probably cause them to further restrict supply.

  6. Biden did what he did because he has no balls to offend the oligarchs. The windfall tax would be way better. and a freeze on prices overall to stop this inflation. If a Republican could do it (many years ago) so could a Deomocrat!!!!

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