Washington – Reacting to record-high gas prices, a senator said he plans to introduce a bill today to tax the windfall profits of oil companies.
Energy companies would face higher taxes once oil prices rise above $40 a barrel, Sen. Byron Dorgan, D-N.D., said Tuesday at a Senate hearing on high gas prices. Money from this tax would be refunded to consumers, but Dorgan declined to elaborate further and planned a news conference on the legislation for today.
“These are windfall profits reaped at the expense of consumers,” he said. “This is as far from a free market as anything I know.”
The legislation will be very controversial and most likely opposed by both the oil industry and many Republicans. But the issue of gas prices heated up this week in Washington. Twenty-one senators attended Tuesday’s Energy and Natural Resources Committee hearing on high pump prices on their first day back from summer recess.
Gas prices rose 46 cents last week to a national average of $3.07 a gallon for regular, the Energy Information Administration reported Tuesday, and several parts of the country were 20 cents higher.
A windfall profits tax, like one imposed on oil in the 1980s, would discourage U.S. oil production, said Bob Slaughter, president of the National Petrochemical and Refiners Association. The industry earned low profits between 1993-2002, he said, and refiners also have invested substantially to meet new environmental regulations.
