Democrats in Congress are reviving legislation aimed at lowering gas prices for American drivers as fuel costs remain elevated during the ongoing Iran conflict.
The Big Oil Windfall Profits Tax Act was introduced on March 17 by two Democrats, Representative Ro Khanna of California and Rhode Island Senator Sheldon Whitehouse to combat spiking gas prices.
Gas Prices Fuel Political Pressure
Growing support among Democrats for the bill comes as gas prices have spiked to an average of $4.51 per gallon as of Sunday, up from the $3 level at the start of the Iran war.
Historically, $4-per-gallon gasoline has triggered public anxiety, making the Republicans vulnerable going into the November’s midterm elections.
Reuters reported that White House officials are trying to deal with the economic and political fallout of the war which has seen Iran block the Strait of Hormuz through which, in pre-war times, one fifth of the world’s energy would transit.
The blockade has disrupted the volatile global oil market by reducing supply and choking key shipping lanes and the impasse has raised fears that oil prices could go up even higher.
How the Tax Would Work
The legislation targets companies producing or importing at least 300,000 barrels per day and would impose a 50 percent tax on the difference between current oil prices and last year’s average.
The revenue generated would be returned to consumers through quarterly rebates. This amount would phase out to single filers who earn more than $75,000 in annual income and joint filers who earn more than $150,000.
With oil now around $100 per barrel, the move would raise approximately $33 billion annually and mean that single filers would receive approximately $216 and joint filers roughly $324 annually, according to a statement on the website of the U.S. Senate Committee on Environment and Public Works.
“We should send any big windfall for Big Oil back to the hardworking people who paid for it at the gas pump,” Whitehouse said in a statement on March 17 about the legislation which has the backing of groups such as the League of Conservation Voters, the Make Polluters Pay Campaign and the environmental group the Sierra Club.
Democratic Support Expands
The Big Oil Windfall Profits Tax Act had several Democrat-aligned co-sponsors, including Senators Elizabeth Warren of Massachusetts, Vermont’s Bernie Sanders and Cory Booker, from New Jersey.
The bill was introduced to the House by Khanna and co-sponsored by Democratic Representatives Rashida Tlaib of Michigan and Seth Magaziner of Rhode Island. In the last two months, five other Democratic representatives have added their names to the list of co-sponsors.
These are Representatives. Mike Quigley of Illinois on March 26, Gabe Amo of Rhode Island on April 16 and Al Green from Texas on April 30. The two most recent joiners were Representatives Jared Huffman of California on May 12 and Chellie Pingree from Maine on May 14.
Trump Pushes Alternative Plan
Meanwhile, President Donald Trump has reportedly backed suspending the federal gas tax as an alternative way to reduce prices.
According to Reuters, the proposal would temporarily remove the federal gasoline tax of 18 cents per gallon in what sources described as a “visible consumer relief move.”
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