Biden to propose contingency tax on oil windfall profits

President Biden will call on Congress to consider new tax sanctions on oil and gas companies if they refuse to increase domestic production as the White House hopes to contain rising fuel prices ahead of the midterm elections.

On Monday afternoon, the president will give a White House speech about “major oil companies making record profits despite refusing to help lower gas station prices for the American people,” according to the White House schedule.

It is reported by the Associated Press. that Biden will raise the idea of ​​a contingency tax after Exxon Mobil, Chevron and Shell reported record profits in the latest quarter, even as gas prices remain high across the country.

The president is not expected to approve the specific proposal, but will pressure energy companies to “invest their record profits in lowering American families’ spending and increasing production,” a White House spokesman said ahead of Biden’s speech. “And if they don’t, he will call on Congress to consider requiring oil companies to pay tax penalties and other restrictions.”

Biden and the Democrats have been trying to blame the energy giants for the soaring gas prices that may have hurt their chances in next week’s midterm elections, which will determine whether the party retains control of Congress.

The administration has battled the political fallout from high fuel prices, which have risen to a national average of $5 a gallon over the summer, as they hope to sell voters on Biden’s economic gains. The gas station price is currently about $3.76 per gallon on the national average, according to the American Automobile Assn.

Biden has repeatedly urged energy companies to lower gas station prices, accusing some of making record profits amid a global energy crisis exacerbated by the war in Ukraine. But in his speech on Monday, the president is expected to sharpen his rhetoric and embrace the idea of ​​a contingency tax, a proposal that some progressive Democrats have previously urged the White House to consider.

The economy and inflation remain the top two priorities for voters heading to the polls on November 1st. eight.

Any tax on oil and gas companies is unlikely to find sufficient support in Congress, where Democrats will need at least 10 Republicans to overcome a filibuster in the Senate.

The President became the last Democrat to support the proposal to impose a tax on excess profits. Earlier this month, the governor of California. Gavin Newsom called an extraordinary legislative session in December, lawmakers will consider introducing a contingency tax in a state where gas prices average $2.50 higher than the rest of the country.