Tag Archives: tax (literature subject)

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Dems Introduce Windfall Tax on Big Oil So Companies ‘Pay a Price When They Price Gouge’

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“This is a bill to reduce gas prices and hold Big Oil accountable,” said Rep. Ro Khanna, who led the measure in the U.S. House.

Congressional Democrats on Thursday introduced the bicameral Big Oil Windfall Profits Tax to target price gouging by profit-gorging fossil fuel companies amid Russian President Vladimir Putin’s invasion of Ukraine.

“We need to curb profiteering by Big Oil and provide relief to Americans at the gas pump—that starts with ensuring these corporations pay a price when they price gouge.”

“This is a bill to reduce gas prices and hold Big Oil accountable,” declared Rep. Ro Khanna (D-Calif.), who’s leading the measure in the U.S. House.

“As Russia’s invasion of Ukraine sends gas prices soaring,” said Khanna, “fossil fuel companies are raking in record profits. These companies have made billions and used the profits to enrich their own shareholders while average Americans are hurting at the pump.”

Sen. Sheldon Whitehouse (D-R.I.) introduced the legislation in the upper chamber along with co-sponsors including Sens. Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), and Bernie Sanders (I-Vt.).

The proposal followed President Joe Biden’s announcement earlier this week of a ban on U.S. imports of Russian fuels and amid swelling accusations that Big Oil has been taking advantage of the crisis in Ukraine to “pad their bottom line with war-fueled profits.”

The Democrats’ proposal aims to get some relief for Americans, who are facing average gas prices of $4.31 a gallon.

Big oil companies, specifically those that produce or import at least 300,000 barrels of oil per day, are targeted under the measure. They would face a per-barrel tax—whether the oil is domestically produced or imported—equal to 50% of the difference between the current price of a barrel of oil and the average price per barrel between 2015 and 2019.

The measure exempts smaller companies, which, according to a statement from the lawmakers, account for roughly 70% of the domestic production. This approach is meant to deter the larger multinational producers from simply raising prices.

The tax imposed on the energy firms would be quarterly. Consumers would receive quarterly rebates, with the relief phasing out for single filers earning more than $75,000 annually and joint filers earning more than $150,000 annually. The lawmakers project the tax to raise $45 billion per year at $120 per barrel of oil, delivering to single filers $240 annually and joint filers $360 annually.

“While Putin’s war is causing gas prices to go up, Big Oil companies are raking in record profits,” Warren said in a statement. “We need to curb profiteering by Big Oil and provide relief to Americans at the gas pump—that starts with ensuring these corporations pay a price when they price gouge, and using the revenue to help American families,” she said.

A number of social justice and climate groups heaped praise on the legislative proposal.

According to Richard Wiles, president of the Center for Climate Integrity, “The oil and gas industry got the world into this mess by lobbying and lying to keep us hooked on fossil fuels. Now they’re using the war in Ukraine to distract us from the fact that they are ripping off hard working Americans with high gas prices as they reap record earnings.”

“It’s time we stop allowing Big Oil to use its record profits, earned on the backs of hard-working American families, to reward wealthy shareholders and CEOs, and instead make them pay a fair share to lower the cost for consumers,” he added.

Collin Rees, U.S. program director at Oil Change International, welcomed the proposal as precisely the opposite of what the fossil fuel lobby has called for to counter Putin’s power, namely expanded domestic fossil fuel production.

“The so-called ‘solutions’ to the energy crisis being put forward by Big Oil companies and the American Petroleum Institute would do nothing but further line their own pockets and lock in a climate-wrecking, fossil-fueled future,” he said. “What’s needed now is immediate relief for American consumers, which is what this commonsense windfall profits tax bill would provide.”

The bill also drew plaudits from Lukas Ross, program manager at Friends of the Earth, which released an analysis Thursday along with BailoutWatch finding that Big Oil CEOs have “absolutely” used the spiked in fuel prices triggered by Russia’s invasion of Ukraine to “price-gouge and profiteer.”

In a statement responding to the new legislation, Ross said: “All-American oil oligarchs are profiteering off the war in Ukraine while sacrificing our communities and climate. The windfall profits tax will require Big Oil to pay their fair share while putting billions of dollars back into the pockets of taxpayers.”

Originally published on Common Dreams by ANDREA GERMANOS and republished under  a Creative Commons license (CC BY-NC-ND 3.0)

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Business, Climate Solutions, News, Observation

‘Enough Is Enough’: Report Shows Big Oil’s Offshore Tax Loopholes Cost US at Least $86 Billion Per Year

“We continue to bankroll the very fossil fuel companies responsible for the climate crisis, then wonder why our planet is on fire.”

A new report released Wednesday identifies $86 billion worth of offshore tax loopholes that a dozen U.S.-based oil and gas companies exploit each year as part of a “tax bonanza,” a finding that comes as climate justice advocates push Congress to eliminate subsidies to the fossil fuel industry.

“Our government cannot continue to bankroll climate destruction,” Friends of the Earth tweeted Wednesday.

The report (pdf), compiled by Friends of the Earth, Oxfam America, and BailoutWatch, reveals the consequences of “two esoteric provisions in the tax code worth tens of billions of dollars to Big Oil’s multinational majors,” including ExxonMobil, Chevron, ConocoPhillips, and other polluters most responsible for the climate emergency.

As a result of the GOP’s 2017 tax law, corporations that drill overseas benefit from special treatment under the Global Intangible Low-Tax (GILTI) framework, which covers Foreign Oil and Gas Extraction Income (FOGEI).

The Treasury Department estimates that repealing the Trump-era exemption for FOGEI would raise $84.8 billion in revenue from just 12 companies that are currently eligible for the carveout, the report notes.

“It is unfortunate but not surprising that the handful of companies benefitting from these loopholes are lobbying to protect their special treatment.”
—Chrive Kuveke, BailoutWatch

Another corporate handout, the so-called dual capacity loophole, is “a longstanding gimmick” wherein fossil fuel giants “artificially inflat[e] their foreign tax bills” to evade U.S. taxes.

Although they are permitted to claim tax credits for taxes paid to foreign governments, U.S. companies are not allowed to do so for non-tax payments such as royalties. 

“In practice, however, the categories often are commingled—particularly when companies make a single combined payment including both taxes and fees,” the report explains. “A foreign country may even try to disguise non-tax payments as a tax, knowing that in many cases a multinational company may receive a foreign tax credit from its home country. Existing regulation gives dual capacity taxpayers vast latitude to assert what portions of their payments are taxes eligible to offset U.S. tax bills.” 

Eliminating the dual capacity loophole would raise at least an additional $1.4 billion, according to the Biden administration, while the Joint Committee on Taxation puts the figure somewhere between $5.6 billion and $13.1 billion. The report points out that “the estimates vary so widely in part because we have precious little visibility into Big Oil’s payments to governments—and that’s just how the companies want it.”

“As Democrats propose closing loopholes to help cover the cost of their $3.5 trillion reconciliation package,” the report states, “these obscure subsidies present a rare chance to act on climate, fund infrastructure, and promote tax fairness in a single stroke.”

While the House Ways and Means Committee’s markup of the Build Back Better Act includes a tax reform proposal that would reverse the FOGEI carveout and the dual capacity loophole, it would leave intact at least $35 billion in federal subsidies for domestic fossil fuel production—despite President Joe Biden’s call to phase out polluter giveaways over a decade.

House Democrats’ failure to stop showering Big Oil with public money—a move supported by a majority of people in the U.S. and many, though not all, Democratic lawmakers—has drawn progressives’ ire.

“The House bill made a decent start by targeting Big Oil’s international tax loopholes, but it went nowhere near far enough,” Lukas Ross, Climate and Energy Justice program manager at Friends of the Earth, said Wednesday in a statement.

Senate Majority Leader Chuck Schumer (D-N.Y.) “needs to lead on climate and ensure that all $121 billion in fossil fuel subsidies are repealed in the final package,” Ross added.

According to Daniel Mulé, policy lead for Oxfam’s Extractive Industries Tax and Transparency project, “U.S. Big Oil companies like Exxon and Chevron have fought tooth and nail to keep the payments they make to governments around the world a secret, while paying lip service to the global movement for payment transparency.”

“This secrecy,” said Mulé, “has a potential tax impact in the U.S. as well, as it makes it all the more difficult to discern if U.S. oil and gas companies are illegitimately inflating their foreign tax credits.”

The report draws attention to several legislative proposals that would do away with subsidies for domestic fossil fuel production as well as tax exemptions for foreign extraction, including:

The report was released the same day members of the Congressional Progressive Caucus urged House leaders to include a repeal of domestic fossil fuel subsidies in the Democrats’ Build Back Better Act.

“Instead of creating jobs,” the progressive lawmakers wrote, the subsidies “widen the profit margin of fossil fuel companies.”

The report emphasizes that fossil fuel champions—including the Exxon lobbyist who was caught on camera discussing how the company benefits from offshore tax loopholes and intends to further undermine climate action—are fighting hard to preserve billions of dollars in taxpayer-funded handouts.

“Big Oil isn’t going quietly,” said Chrive Kuveke, an analyst at BailoutWatch. “Since Biden became president, it is unfortunate but not surprising that the handful of companies benefitting from these loopholes are lobbying to protect their special treatment.”

Originally published on Common Dreams by KENNY STANCIL and republished under Creative Commons.

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Economics, Finance, Observation, Politics

Who Created our Obscene Levels of Income Inequality?: Laws & Tax Codes

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Only the 99% can change it

Ask almost any billionaire how they got so obscenely rich and , invariably, you will get the response: “I just did what the law allows” or some convoluted version of that idea. Tax laws, property and financial regulations and structures, corporate stock options, Roth IRA tricks, all the tried and true methods outlined in a slate of recent articles from ProPublica and others are rightfully given credit for the insanely massive windfalls.

Not that these arrogant, self-centered sociopaths don’t jump at the chance to take credit for their “miraculous” good fortune, or even write books and “let” others write books about all the “genius” ideas and methods they used to conquer the universe.

Jeff Bezos is the most ridiculous example of this, literally dozens of books exist only to extol the virtues and genius of this a-hole that basically used one simple trick: selling dollar bills for .75 cents and using the stock market to “monetize” a trillion in intentional losses and turn them into “wealth”, to amass his absurd mountain of “worth”, yet if you read these books the central concept of his fraud doesn’t even get a mention.

Of course, 25 years later, the FTC and Lina Khan are finally beginning to wake up to the simple fact that, not only is the entire scam something that “ought-a-be-illegal”, but literally is illegal and always was, yet this comes across, so far, as a somewhat pathetic attempt to put a band-aid on the world after a nuclear holocaust has already devastated the planet.

AOC used her beauty and a cheeky dress to highlight the issue of income inequality

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AOC at the Met Gala styled herself in a “Tax the Rich” gown. The look on her was beautiful. The subject matter being broached couldn’t be uglier. Tax the rich a not a bad idea, but the system is so screwed up, and so far from any semblance of “fair”, that a few little pin pricks on trillions in undeserved holdings is basically meaningless.

How can it be said that the system is that far gone? It’s in the numbers and the proportions of “wealth”. The extremes of unequal wealth distribution have risen to levels so incredible, that it’s as if they are turning into an economic ouroboros dragon that will expand and swallow itself until it has devoured all life.

The increases, during the pandemic, for example, in the “net-worth” (which is in itself an obscene concept for measuring humans) of the worlds richest animals was like the replication of the virus the rest of us were fighting to avoid, most with too few resources to have any hope of being rescued by medical intervention, if we got infected.

This idea and proof of a system vastly out of balance can be seen everywhere you look…

In a recent, excellent, NYT article on Afghanistan multiple examples were cited illustrating who really “won” that endless war, and points out that it wasn’t the just Taliban. It was locals entrepreneurs and politicians who, early on, saw the opportunity for what it really was, a way to build personal fortunes supplying the US military with support and comfort during the endless, directionless morass.

Several examples were of people who began the war as local american sympathizers and ended up with fortunes hundreds of millions of USD and more, virtually none of which trickled into the local populations which, ostensibly, the war was meant to give a chance for “democratic freedom”. And capitalism.

As pointed out in another article recently, “One Year of Afghanistan War Spending Could Fund Resettlement of 1.2 Million Refugees” . The title says it all.

Here’s a couple of paragraphs from the NYT article in full :

”Consider the case of Hikmatullah Shadman, who was just a teenager when American Special Forces rolled into Kandahar on the heels of Sept. 11. They hired him as an interpreter, paying him up to $1,500 a month — 20 times the salary of a local police officer, according to a profile of him in The New Yorker. By his late 20s, he owned a trucking company that supplied U.S. military bases, earning him more than $160 million.”

“If a small fry like Shadman could get so rich off the war on terror, imagine how much Gul Agha Sherzai, a big-time warlord-turned-governor, has raked in since he helped the C.I.A. run the Taliban out of town. His large extended family supplied everything from gravel to furniture to the military base in Kandahar. His brother controlled the airport. Nobody knows how much he is worth, but it is clearly hundreds of millions — enough for him to talk about a $40,000 shopping spree in Germany as if he were spending pocket change”

New York Times

Redistribution will likely only happen after the entire system collapses of its own stupidity

Hubris and pride before the fall is the reason that, when you read this, you’ll think perhaps this writer has lost his marbles. But the system is unsustainable in its current unequal, and increasingly unjust, form.


Sources: March 18, 2020 data: Forbes, “Forbes Publishes 34th Annual List Of Global Billionaires,” accessed March 18, 2020. August 17, 2021 data: Forbes, “The World’s Real-Time Billionaires, Today’s Winners and Losers,” accessed August 17, 2021.

Just one more ballooning of the one tenth of one percent and the system will be so out of balance, that only a total and complete realignment of reality will allow any kind of improvement in the distribution of resources.

In fact, the opposite outcome is far more likely, where to increase in the imbalance will continue ‘till there are no options, but for the current system to be drowned in its own orgy of self-congratulations.

The solutions that are out there, many even championed ironically and paradoxically by the very billionaires that sit on top of this mountain of inequality, could work. But a “penny tax” or some kind of gratuitous show of “generosity” by those that have wealth that, if the system were designed with any form of equal distribution, they would not, and could not, have, is less than nothing.

Similar to the climate conundrum, things will have to get worse, it appears, to engage and enrage people, and wake enough people up, to set a fire under enough people, to build to a tipping point toward real change. Fortunately, if you accept that inverted and convoluted logic, that day is very near.

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