US Senator Ron Wyden, a Biden ally from Oregon, is proposing a new piece of legislation that would set a 21% surtax on oil companies for what would be considered price gouging or “excessive profits,” according to two people familiar with the proposal. The idea is that this would be on top of the 21% corporate tax these companies already face.
In theory, the legislation would only take effect for companies that are raking in a profit margin of more than 10%, supposedly lowering the incentive for raising oil and gas prices to increase profit. He said that companies that lowered their prices or “provide relief to consumers” would not have to face the additional taxes.
But the legislation faces strong opposition from Republicans in the Senate, and it would require all 50 Democratic senators to agree on it to actually get it passed.
“The proposal I’m developing would help reverse perverse incentives to price gouge, by doubling the corporate tax rate on companies’ excess profits, eliminating egregious buybacks and reducing accounting tricks,” said Senator Wyden of his proposal.
“By contrast, companies that provide relief to consumers by either reducing prices or investing in new supply would not be affected.”