Profit companies

US Senate finance chairman to propose excess oil profits tax

Senator Ron Wyden (D-OR) speaks during the Senate Finance Committee hearing on the nomination of Chris Magnus as the next U.S. Commissioner of Customs and Border Protection, at the Office of the Senate Dirksen on Capitol Hill in Washington, DC, U.S. October 19, 2021. Mandel Ngan/Pool via REUTERS

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WASHINGTON, June 14 (Reuters) – U.S. Senate Finance Committee Chairman Ron Wyden is considering introducing legislation establishing a 21% surtax on oil company profits deemed excessive, an aide to the senator.

The bill applies an additional 21% tax on the excess profits of oil and gas companies with more than $1 billion in annual revenue, the aide said. The 21% tax would be in addition to any ordinary income tax due. Profits above 10% would be considered excessive under the bill, the aide said.

Unlike other proposed windfall taxes, the aide said, Wyden’s would apply the tax based on profit margins, not oil prices. Businesses making normal profits based on their expenses would pay no additional tax.

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“While Americans are paying more to fill their gas tanks, big oil companies are reaping record profits, rewarding their CEOs and wealthy shareholders with massive stock buybacks and using special loopholes in the tax code to avoid pay next to nothing in taxes,” Wyden, a Democrat, said in a statement.

President Joe Biden on Friday accused the U.S. oil industry, and Exxon Mobil Corp in particular, of capitalizing on a supply crunch to fatten profits after a report showed inflation hit a new 40-year record. Read more

Bloomberg first reported the planned legislation.

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Reporting by David Shepardson; Written by Doina Chiacu; Editing by Lisa Shumaker

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