President Biden Proposes High Tax Rates for Oil and Gas Companies

President Biden Proposes High Tax Rates for Oil and Gas Companies

The Issue with Oil and Gas Giants  

At a White House conference on October 31st, President Biden spoke critically of oil and gas companies for their inequitable methods. While these oil and gas giants make massive amounts of profit, American citizens are expected to pay outrageous energy prices. The rising gas prices are taking a toll on contemporary society, and to many, it seems like there’ll be no end. The Biden Administration, however, is intent on leveling the playing field. It’s not yet been decided if there will be harsher taxes levied on these companies or if there will be limitations on how they operate. Either way, oil and gas mega-corps are expected to lose a significant amount of profit in the process.

Some Context

While the war is still very much raging in Ukraine, corporations like ExxonMobil, Shell, and Chevron have garnered record profits in the third quarter. They’ve been accused of war profiteering—just one of the many critiques Biden provided. After cutting ties with Russian resources, the American people have faced higher energy prices than ever before. The Biden Administration intends to work with Congress on proposals to alleviate the situation, but in the meantime, everyday citizens have become impatient. Will these proposals be enough to make an impact?

Congressional Efforts

Since Congress is responsible for setting tax policy, Biden’s proposed windfall tax lies entirely in their hands. Many predict, however, that the tax is unlikely to gain favor in Congress for a multitude of reasons. To make such a contentious move, it’ll require more Democratic seats, hopefully meeting the majority vote. It’s also quite possible that not all sitting Democrats would be in favor of the tax. Windfall profit taxes have not been promising in the past. They’re difficult to implement, and they often discourage investment. So where do we go from here? With such a contentious decision at hand, policymakers must determine where to draw the line before too much damage is done. The American people are valid in their frustrations, but does that justify the act of putting financial limitations on corporations? That’s for Congress to decide now.

 

Written By: Meghan Macaya, The GCMG Agency, Social Media Coordinator

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