Bill Overview
Title: Federal Gas Tax Suspension and Windfall Profits Tax Act of 2022
Description: This bill suspends the excise tax on gasoline (other than aviation gasoline) until December 31, 2023. It also imposes a 50% tax on the excess profits of certain large oil companies in the first taxable year after 2021.
Sponsors: Rep. Schiff, Adam B. [D-CA-28]
Target Audience
Population: Global consumers and shareholders linked to fuel prices and oil company profits
Estimated Size: 331000000
- The bill suspends the federal excise tax on gasoline, potentially lowering gas prices for consumers in the U.S. This can affect every American who purchases gasoline for vehicles, machinery, or other uses, which includes the majority of households and businesses.
- The imposition of a 50% tax on excess profits of certain large oil companies could impact these companies' shareholders worldwide. This includes institutional and retail investors who hold shares in these oil companies.
- The broader economic impact could extend to global markets and industries reliant on U.S. fuel prices, potentially affecting consumers globally.
Reasoning
- The Federal Gas Tax Suspension is likely to provide immediate financial relief to those who frequently purchase gasoline, affecting a very broad population due to the high percentage of car ownership in the U.S.
- The windfall profits tax on oil companies might not have a direct impact on everyday consumers initially, but any changes in corporate financial strategies could influence energy prices in the longer term.
- Households with more vehicles or higher dependency on gasoline would see a more pronounced relief in terms of expenses, potentially translating into slight increases in their wellbeing scores.
- The long-term effects of reduced tax burdens and a windfall tax on oil companies' profits could affect the energy market dynamics, shareholder wealth, and overall economic conditions.
- The policy is within budget constraints, assuming administrative efficiency in implementation, as $25 billion USD is allocated for the initial year and $29 billion over 10 years, impacting a substantial proportion of Americans.
Simulated Interviews
School Teacher (Dallas, TX)
Age: 35 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 1.5 years
Commonness: 18/20
Statement of Opinion:
- The policy might lower my gas expenses, which is great because gas prices have been quite high.
- I'm slightly worried about long-term effects if oil companies pass costs onto consumers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Retired Farmer (Rural Iowa)
Age: 62 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- Reduced gasoline price is beneficial, especially given the high energy costs for farming.
- Not sure if the oil company tax will have wider economic consequences.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Tech Employee (San Francisco, CA)
Age: 28 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 0.5 years
Commonness: 15/20
Statement of Opinion:
- Policy might have some impact, but I don't use much gasoline.
- Could benefit indirectly if lower gas prices mean cheaper goods.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Investment Banker (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 5/20
Statement of Opinion:
- Financial markets may react to the windfall tax, affecting my investments.
- Personal gasoline savings won't be significant.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 5 | 5 |
Auto Factory Worker (Detroit, MI)
Age: 53 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 12/20
Statement of Opinion:
- Lower gas prices will help my monthly budget a lot.
- Concerned about possible inflation in other areas if energy markets are affected.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 4 |
Stay-at-home Parent (Suburban Atlanta, GA)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 1.5 years
Commonness: 14/20
Statement of Opinion:
- Reductions in gasoline cost directly benefit my family's budget.
- Potentially concerned about long-term effects on energy prices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 4 |
Ride-share Driver (Seattle, WA)
Age: 30 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 9/20
Statement of Opinion:
- Lower gas prices allow me to save more or lower my ride charges.
- The windfall tax might affect future gasoline prices indirectly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
College Student (Chicago, IL)
Age: 22 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.5 years
Commonness: 17/20
Statement of Opinion:
- Not directly affected but lower gas prices could reduce costs for goods.
- Concerned about environmental aspects of fuel price manipulations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Independent Consultant (Phoenix, AZ)
Age: 58 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 1.5 years
Commonness: 11/20
Statement of Opinion:
- A reduction in gas prices helps me directly by cutting travel costs.
- Unsure about how oil companies' tax changes might affect my business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Oil Industry Executive (Houston, TX)
Age: 48 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- The windfall tax could affect my company's profitability and stock value.
- I'm concerned about longer-term effects on industry innovation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 6 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Cost Estimates
Year 1: $25000000000 (Low: $23000000000, High: $27000000000)
Year 2: $4000000000 (Low: $3000000000, High: $6000000000)
Year 3: $0 (Low: $0, High: $0)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The temporary suspension of the gasoline tax may lead to a significant decrease in federal revenue, affecting funding for infrastructure projects traditionally supported by these taxes.
- Windfall profits tax will partially offset lost revenue but could deter future investments from the affected oil companies.
- There may be variations in the tax revenue and cost estimates due to fluctuations in gasoline consumption and oil company profits.