Bill Overview
Title: Big Oil Windfall Profits Tax Act
Description: This bill imposes an excise tax on the windfall profits of crude oil on taxpayers who extracted and imported more than 300,000 barrels (a barrel equals 42 U.S. gallons) of taxable crude oil (i.e., crude oil, crude oil condensates, and natural gasoline) in 2019, or who extracted and imported that amount in the current calendar quarter. The bill requires rebates of the tax collected to be paid to individual taxpayers. The bill establishes the Protect Consumers from Gas Hikes Fund to finance such rebates.
Sponsors: Rep. Khanna, Ro [D-CA-17]
Target Audience
Population: Employees and stakeholders of major oil companies
Estimated Size: 100000
- The bill targets companies that extracted or imported more than 300,000 barrels of crude oil in 2019 or in the current calendar quarter.
- This implies that major oil companies and potentially some large independent oil companies would be directly financially impacted by the tax.
- The major global oil companies include ExxonMobil, Shell, BP, Chevron, etc.
- These companies operate worldwide and collectively have a significant global labor force.
Reasoning
- The primary target group affected by the policy includes employees and stakeholders of major oil companies, as well as secondary effects on consumers who might benefit from rebates on oil profits.
- Consideration of the geographical distribution of these companies shows a concentration in areas with significant oil production industry presence, such as Texas, Louisiana, California, and Alaska.
- The policy indirectly affects the broader population by potential rebate distributions, so individuals outside the oil industry may feel impact via economic transfers.
- Given the budget, initial implementation sees a modest per capita benefit if dispersed to consumers, potentially offsetting minor increases in gas prices due to the tax.
- Not all employees of oil companies may feel a direct negative impact, as some may be buffered by the scale of these companies and their global operations.
Simulated Interviews
Petroleum Engineer (Houston, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- I understand the reasoning behind the policy, but I'm concerned about job security and potential layoffs if company profits decline.
- If the rebates are substantial, they might cushion any economic hit in our community.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Gas Station Owner (Los Angeles, CA)
Age: 30 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- Gas prices are always a concern for us. Any abrupt price hikes could hurt our sales.
- Rebates might offset some cost, but it's uncertain how much will trickle down to us.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Oil Rig Operator (Midland, TX)
Age: 53 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I'm worried about job cuts or reduced hours.
- The rebates might help my family, but my main income is from this job.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 9 |
Tech Startup Employee (Seattle, WA)
Age: 27 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- I support the tax as a way to redirect funds toward sustainable energy.
- Rebates are a good step towards equitable energy transition.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Financial Analyst (Chicago, IL)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 9/20
Statement of Opinion:
- Increased volatility might affect oil stock portfolios.
- Rebates present new consumption avenues but entail unclear personal gains.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Retired (New Orleans, LA)
Age: 62 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- Extra income through rebates would help a lot considering my fixed income.
- Concerned about economic shifts possibly affecting local businesses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
College Student (Flagstaff, AZ)
Age: 19 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 11/20
Statement of Opinion:
- I see this as a positive trend towards sustainable energy.
- If rebates help lift low-income families, it's a win for social equity.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 10 | 10 |
Oil Field Worker (Anchorage, AK)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- My paycheck depends on stable oil operations.
- Higher gas costs mean more out of pocket for necessary travel.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 8 |
Renewable Energy Consultant (San Francisco, CA)
Age: 40 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 5/20
Statement of Opinion:
- This tax is crucial for shifting the economy to renewables.
- Rebate incentives could accelerate changes in consumer behavior.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 9 |
| Year 10 | 10 | 9 |
| Year 20 | 10 | 10 |
Public School Teacher (Denver, CO)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- Our community could benefit if rebates are targeted well.
- I'm skeptical about how much of an impact the rebates will have on public services.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Cost Estimates
Year 1: $5000000000 (Low: $4000000000, High: $6000000000)
Year 2: $5000000000 (Low: $4000000000, High: $6000000000)
Year 3: $5000000000 (Low: $4000000000, High: $6000000000)
Year 5: $5000000000 (Low: $4000000000, High: $6000000000)
Year 10: $5000000000 (Low: $4000000000, High: $6000000000)
Year 100: $5000000000 (Low: $4000000000, High: $6000000000)
Key Considerations
- Oil market volatility will affect the windfall profits tax revenue considerably.
- The geopolitical landscape and international oil production agreements can influence the prices, impacting the tax revenue.
- Consumer reaction and their increase in expenditure from rebates will influence the economic impact.