Bill Overview
Title: Taxing Big Oil Profiteers Act
Description: This bill imposes an additional 21% tax through 2025 on the excess profits (i.e., current profits over normal return) of oil and natural gas companies that have average annual gross receipts during a three-year period of over $1 billion. The bill imposes on publicly-traded domestic corporations a tax equal to 25% of the fair market value of the stock of the corporation repurchased during the taxable year. The tax does not apply to a repurchase made after 2025 or that is treated as dividend. It also does not apply if the total value of the stock repurchased during a taxable year does not exceed $1 million. The bill disqualifies certain large oil and natural gas companies from the use of the LIFO (last-in first-out) inventory accounting method.
Sponsors: Sen. Wyden, Ron [D-OR]
Target Audience
Population: People worldwide relying on oil and natural gas
Estimated Size: 331000000
- The bill imposes an additional tax on oil and natural gas companies earning over $1 billion. This means it specifically targets a subset of large corporations within the oil and natural gas industry.
- The implementation of this bill could lead to oil and gas companies passing on the increased tax burden to consumers in the form of higher prices, impacting global consumers of oil and gas.
- Globally, there are many major oil and natural gas corporations that could be impacted by such a bill, especially if similar legislation is adopted in other countries or influences market behavior.
- Oil prices are part of a global market, so changes affecting major producers can impact consumers worldwide, affecting billions of people who rely on oil and gas for transportation, heating, and electricity.
- Changes in oil company profitability could alter market dynamics, potentially impacting suppliers, employees within the industry, and economies dependent on oil exports.
Reasoning
- The policy is targeting large oil and natural gas corporations which could pass on cost impacts to consumers, but the actual wellbeing impact on individuals can vary significantly depending on their reliance on oil and gas.
- Consideration for the population types: individuals in high-consumption jobs, low-income groups who spend a notable portion of their income on energy, and those employed within the oil and gas sector.
- Estimate the impact on wellbeing scores based on price sensitivity and employment in the affected sectors considering a wide demographic to cover variations in impact.
- Simulation reflects a variety of scenarios including direct employment in the industry's extended sectors or professions relatively unaffected by oil costs.
- Budget considerations limit direct financial assistance or benefits redistribution, implying possible indirect tax adjustments for fair mitigation.
Simulated Interviews
Engineer - Oil and Gas (Houston, TX)
Age: 44 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- I am worried about job stability if company profits decline.
- May impact my annual bonus or benefits.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 8 | 8 |
Truck Driver (Los Angeles, CA)
Age: 36 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- Rising fuel prices are a big concern.
- Will need to manage expenses better if fuel prices go up.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 6 |
| Year 2 | 4 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 7 |
Teacher (Boise, ID)
Age: 29 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- I support taxing big companies more for their huge profits.
- Worried it might lead to higher utility or transport costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Investment Banker (New York, NY)
Age: 50 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 2.0 years
Commonness: 2/20
Statement of Opinion:
- The policy might shift stocks and affect market dynamics.
- Could present both risks and investment opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 8 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Retired (Miami, FL)
Age: 65 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- Tax increases don't seem to affect me directly.
- I hope the policy helps manage unnecessary corporate gains.
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 |
Environmental Activist (Denver, CO)
Age: 24 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- I strongly support this policy.
- Hoping it forces a shift to greener energy and impacts climate advocacy positively.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 10 | 8 |
| Year 20 | 10 | 8 |
Restaurant Owner (Chicago, IL)
Age: 58 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 6/20
Statement of Opinion:
- I'm concerned rising costs will squeeze me further.
- These big companies profiting doesn't seem fair when we struggle.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 7 |
Software Engineer (Dallas, TX)
Age: 37 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 8/20
Statement of Opinion:
- May have a neutral impact on my wellbeing.
- Interested in watching how market shifts will affect the tech sector indirectly.
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 |
Public Transit Worker (Boston, MA)
Age: 43 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Public transport costs must be contained.
- Support changes that help manage fuel prices and corporate profits may affect our state's budgeting.
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 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Tech Entrepreneur (San Francisco, CA)
Age: 31 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- Policy could help in directing attention towards greener tech.
- Expecting new opportunities opening for startups on renewable energies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 10 | 9 |
| Year 5 | 10 | 9 |
| Year 10 | 10 | 9 |
| Year 20 | 10 | 9 |
Cost Estimates
Year 1: $500000000 (Low: $400000000, High: $600000000)
Year 2: $300000000 (Low: $250000000, High: $350000000)
Year 3: $100000000 (Low: $80000000, High: $120000000)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The behavioral response of oil companies to the tax might include strategic changes to reduce taxable profits or adjust operations, impacting expected savings.
- Increased taxation on oil companies could result in increased fuel prices, affecting both consumers and inflation.
- International oil markets and prices might influence the financial outcomes of the policy.