By now we are all feeling the rising costs of energy.\u00a0 Gas is heading toward $5 per gallon, home heating costs have risen, with some using oil having their prices jump to nearly $6 per gallon.\u00a0 Utility bills have soared.\u00a0 President Biden argues that these hikes are a \u201cPutin tax\u201d \u2013 referring to Russian \u201cmob boss\u201d Vladimir Putin\u2019s unprovoked aggression in Ukraine.\u00a0 And while there is a lot of truth to the President\u2019s description, it doesn\u2019t answer one question: Who benefits from this \u201ctax\u201d?<\/p>\n\n\n\n
When we pay taxes, we know where it goes. Federal, state, and local governments charge taxes for the delivery of public services. Taxes are the cost of paying for civilization. But when it comes to the \u201cPutin tax\u201d that we pay at the pump, who gets it? Clearly, it\u2019s not the Russian leader, the US has blocked oil and gas imports from Russia. No, those \u201ctaxes\u201d are going to oil companies, who are seeing a surge in their already fat profits.<\/p>\n\n\n\n
With oil prices pushing toward $130 a barrel last week \u2014 a stunning increase from a low of $18 a barrel just two years ago \u2014 oil and gas companies have hit the jackpot.<\/p>\n\n\n\n
Exxon Mobil made $23 billion in profit for 2021. Chevron had its most profitable year since 2014, reporting that it made $15.6 billion in revenue for 2021. BP reported it made $12.85 billion in 2021, with $4.1 billion being made in the fourth financial quarter, the company\u2019s largest quarterly profit since 2013. Shell earned $19.29 billion for the year, up from $4.85 billion in 2020 with $6.4 billion in profits in the last financial quarter of 2021, its largest since 2014. <\/p>\n\n\n\n
The Ukrainian invasion is likely to swell those profits even further as energy supplies get squeezed by global sanctions on Russia.<\/p>\n\n\n\n
The \u201cPutin tax\u201d really means Americans are forking over even more money to oil companies<\/em> to fatten their profits. And let\u2019s not forget that the reason that the world still relies heavily on fossil fuels \u2013 and the revenues that are Putin\u2019s source of military strength \u2013 is because the oil companies have fought tooth-and-nail to block efforts to shift the world toward renewable energy sources, including decades of lying about the dangers of global warming. Beyond their profiteering from global crises, their actions on climate are among the worst in the history of the world.<\/p>\n\n\n\n So shouldn\u2019t some of those profits be diverted to pay for pressing needs, including the costs of dealing with climate change?<\/p>\n\n\n\n At the national level, members of Congress have introduced legislation to enact a \u201cwindfall profits tax.\u201d The bill would levy a 50 percent tax on the profits oil companies earn above the price of $66 per barrel, which was the average oil price from 2015 through 2019. The legislation then sends half the tax collections back to consumers in the form of a rebate, which the sponsors say would amount to a $240 payout to single tax filers and $360 for joint filers next year, if<\/em> the price for oil remains at $120 per barrel.<\/p>\n\n\n\n Of course, the legislation would need to ensure that safeguards exist so that the oil companies simply don\u2019t pass on the cost of the tax to consumers \u2013 thus undermining the benefits of the tax. That\u2019s always the problem \u2013 how to enact a tax to claw back unfair profits in a manner that makes it extremely difficult \u2013 if not impossible \u2013 to pass along the tax costs to the already-overburdened consumer.<\/p>\n\n\n\n Here in New York, there is a growing call for energy tax relief for consumers. Depending on where you live \u2013 sales taxes differ by county \u2013 the combination of New York State and local taxes pay when they buy gas can be as high as nearly 50 cents per gallon. Expect some sort of relief from state gas taxes this session. <\/p>\n\n\n\n There is<\/em> another approach \u2013 one that diverts oil industry profits and does so in a way that protects consumers. Policymakers have been mulling a \u201cMake Polluters Pay\u201d program that would assess the largest oil companies for their contribution to greenhouse gas emissions over the past two decades, with the companies paying for their proportional share of the harm they caused. By requiring only the largest companies to pay, market competition from their smaller competitors would keep prices low, thus making it impossible for Big Oil to pass along the costs of the assessment. That type of approach seems like the best way to divert excess profits and to fund the costs of climate change.<\/p>\n\n\n\n As policymakers sort this out, there are things that consumers can do now to help offset the skyrocketing costs of energy. <\/p>\n\n\n\n In the short-term<\/em>, drive less, keep homes a bit cooler, and conserve more. In the medium term<\/em>, see about renewable energy options. Solar power and geothermal power, if appropriate, can reduce reliance on fossil fuels. Adding insulation to your home can reduce the need for expensive heating too. <\/p>\n\n\n\n In the longer term<\/em>, push lawmakers to make renewable power the clear option for the future. Petrodollars tend to fund many of the world\u2019s worst actors. As long as the nation relies on oil, they literally have the world over a barrel. Kicking the fossil fuel habit will deprive Big Oil of profits and help mitigate global climate change. And, of course, let\u2019s make the climate polluters pay.<\/p>\n","protected":false},"excerpt":{"rendered":" By now we are all feeling the rising costs of energy.\u00a0 Gas is heading toward $5 per gallon, home heating costs have risen, with some using oil having their prices jump to nearly $6 per gallon.\u00a0 Utility bills have soared.\u00a0 President Biden argues that these hikes are a \u201cPutin tax\u201d \u2013 referring to Russian \u201cmob […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2691","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts\/2691","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/comments?post=2691"}],"version-history":[{"count":1,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts\/2691\/revisions"}],"predecessor-version":[{"id":2692,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts\/2691\/revisions\/2692"}],"wp:attachment":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/media?parent=2691"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/categories?post=2691"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/tags?post=2691"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}