A group of House lawmakers have introduced legislation that would give Americans a $500 direct cash rebate aimed at easing the sting of high gas prices.
How it’s paid for: by eliminating 11 of the most egregious tax subsidies flowing to fossil fuel companies.
Donald McEachin (VA-04), Sean Casten (IL-06), and Earl Blumenauer (OR-03) introduced the People Over Petroleum Act. The trio, in March, had urged House leadership to address gas price increases by pairing a direct cash rebate for consumers with a repeal of some of the hundreds of billions in direct and indirect tax subsidies flowing to oil and gas companies.
Their call came after analysis by Accountable US found that oil and gas company giants Shell, Chevron, BP, Exxon posted record profits in 2021 totaling $75 billion while American consumers struggled to pay heating bills and fill up their gas tanks.
According to the IMF, fossil fuels companies receive nearly $650 billion a year in direct and indirect U.S. tax subsidies.
“Virginians in my home state and Americans across the nation are feeling pain at the pump while the fossil fuel industry enjoys record-breaking, multi-billion-dollar profits,” McEachin said. “We cannot allow this type of behavior from Big Oil to go unchecked. High energy prices have left Americans struggling to fill up their tank while working to make ends meet. I am proud to lead my colleagues in introducing this crucial legislation to help Americans get through this tenuous period with direct cash rebates – think of them like gas debit cards, delivered directly to consumers. Our legislation will also ensure Big Oil pays its fair share and support our path to a clean energy future.”
Upon the bill’s passage, the following 11 subsidies oil and gas companies currently enjoy would be eliminated:
- Amortization of geological and geophysical expenditures
- Producing oil and gas from marginal wells
- Enhanced oil recovery credit
- Intangible drilling and development costs in the case of oil and gas wells
- Repeal of percentage depletion for oil and gas wells
- Repeal of deduction for tertiary injectant
- Repeal of exception to passive loss limitations for working interests in oil and gas properties
- Reduction for qualified business income not allowed with respect to oil and gas activities
- Prohibition on using last-in, first-out accounting for oil and gas companies
- Modifications of foreign tax credit rules applicable to dual capacity taxpayers
- Clarification of tar sands as crude oil for excise tax purposes
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Chris Graham
