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Biden Threatens Windfall Tax, Accuses Big Oil of "War Profiteering"

Biden Threatens Windfall Tax, Accuses Big Oil of "War Profiteering"

President Biden has accused oil companies of "war profiteering" as their profits rise, threatening to hit the industry with a windfall tax.

During a press conference at the White House yesterday, Biden said:

“If they don’t [reduce fuel prices], they’re going to pay a higher tax on their excess profits and face other restrictions. My team will work with Congress to look at these options that are available to us and others. It’s time for these companies to stop war profiteering, meet their responsibilities to this country, give the American people a break and still do very well.”

Biden and his officials have been eager to redirect public disdain for high prices at the pump as midterm elections approach -- if Democrats want to have any hope of maintaining control of both the House of Representatives and the Senate after November 8, Biden's team knows they must flip the script on gasoline costs. 

The New York Times shared that the oil industry itself is frustrated, accusing "the president of politicking, noting that gas prices have come down by roughly a quarter since summer."

“Rather than taking credit for price declines and shifting blame for price increases,” said Mike Sommers, head of a trade group known as the American Petroleum Institute, “the Biden administration should get serious about addressing the supply-and-demand imbalance that has caused higher gas prices and created long-term energy challenges.”

Recently, however, big oil has come under scrutiny for huge profit increases -- Shell, for example, saw double the profits in Q3 2022 than they did in the same period of time last year. 

In early October, California Governor Gavin Newsom (D) called for a new "windfall profit" tax on oil companies, preceding Biden's comments yesterday. 

Intriguingly, Shell CEO Ben van Beurden recently spoke out at the Energy Intelligence Forum in London, indicating that he believes oil giants should face more taxes

He said, “One way or another there needs to be government intervention. Protecting the poorest, that probably may then mean that governments need to tax people in this room to pay for it.”

One potential solution that has been discussed in the European Union -- where an ongoing energy crisis could potentially lead to thousands of cold-weather deaths this winter -- is a cap on the price of natural gas to assist consumers, especially those who have low incomes. 

Per Bloomberg, van Beurden criticized this approach, however. The executive indicated that large corporations like Shell and its competitors would struggle to send additional natural gas shipments to Europe without a price incentive.

As for prices in the United States, it remains to be seen if Biden's notion of a windfall tax will come to fruition. 

The Times noted it is unlikely, and that "it was more of a way to pressure the oil firms than a realistic policy prescription for the short term given that Congress is not even in session and would be even less likely to approve such a measure if Republicans capture one or both houses in next week’s election."

What do you think about President Biden's ultimatum to oil companies?

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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