Great Britain and Italy are introducing an additional profit tax on the profits of oil and gas producers, and similar demands are also being made in Germany. Now the US is following suit and considering an excess profits tax to redistribute the high profits of the oil companies.
In view of the high energy prices, the US government is examining special taxes for oil and natural gas producers in order to give the money to poorer citizens. "There are a number of interesting proposals and design options for an excess profit tax," said Bharat Ramamurti, deputy director of the National Economic Council, at an event hosted by the Roosevelt Institute think tank. "We are reviewing all of them carefully and are in talks with Congress about the design."
Among other things, there is a discussion about imposing a new tax on large oil companies. The money is to flow in the form of a tax refund to citizens whose income is below a certain threshold. However, it is unclear whether such measures can find a majority in Congress.
Midterm elections will be held in November, in which the entire House of Representatives and a third of the Senate will be reelected. President Joe Biden is under pressure before the vote, in particular because of comparatively high gasoline prices. Recently there have been indications in the US that inflation may have peaked.
The big oil producers have made record profits because of the high energy prices. The UK announced last week an additional profit tax of 25 percent on the profits of oil and gas producers. In March, Italy introduced a special tax for energy companies to finance a package of measures to alleviate the consequences of the Ukraine war. There are also corresponding requirements in Germany. In the traffic light coalition, the leader of the Green Party, Ricarda Lang, has advocated an excess profit tax. Finance Minister Christian Lindner, however, rejected such ideas at the beginning of May.