'Could Be a Political Game Changer': Biden to Float Windfall Profits Tax on Oil Giants

Following months of sustained pressure from progressive campaigners and members of Congress, President Joe Biden on Monday is reportedly planning to suggest imposing a windfall profits tax on oil companies if they refuse to boost production and lower costs for consumers.

Biden is set to float the popular tax proposal during a White House speech at 4:30 pm ET, days after oil companies in the U.S. and Europe reported massive--and, in the case of ExxonMobil, record-shattering--profits for the third quarter of this year.

"We need a windfall profits tax. The revenue should go directly back to the American people."

The Washington Postreported that "the president is not expected to formally endorse the tax but instead to urge that one should be explored if the energy giants do not expand their output."

"The White House has been frustrated by what aides see as energy companies' use of record profits to reward shareholders rather than produce more product and bring down prices at the pump," the Post added, citing unnamed people familiar with Biden's planned remarks.

According to the watchdog group Accountable.US, Chevron and Exxon have delivered $32 billion to shareholders in the form of dividends and stock buybacks this year as consumers in the U.S. and around the world have struggled to afford high gas prices. While a number of countries, including the United Kingdom, have imposed windfall profits taxes on energy giants in recent months, the U.S. has yet to take such a step, which would require the approval of Congress.

"This is the right thing for President Biden to do," Rep. Ro Khanna (D-Calif.), one of the leading congressional advocates of a windfall profits tax, tweeted Monday in response to news of Biden's address, which will come just over a week before the midterm elections.

Back in March, Khanna introduced legislation that would tax the excess profits of oil giants and return money to U.S. households in the form of a quarterly rebate.

"It's time to hold Big Oil accountable for high gas prices and put that money back in the pockets of Americans," Khanna added.

Biden has repeatedly criticized oil companies for raking in huge profits at the expense of U.S. consumers, but he's thus far stopped short of backing specific legislative action to punish the fossil fuel industry over its profiteering despite survey data showing that a windfall profits tax is extremely popular with the U.S. public.

One poll conducted in March found that 80% of U.S. voters--including 73% of Republicans--support "placing a windfall profits tax on the extra profits oil companies are making from the higher gasoline prices they are charging because of the Russia-Ukraine situation."

Jamie Henn, the director of Fossil Free Media and a spokesperson for the Stop the Oil Profiteering campaign, cited that data point to argue the president's speech Monday "could be a political game changer for Democrats" ahead of the midterms.

"This is exactly the type of leadership we've been waiting for from President Biden," Henn said in a statement. "Big Oil has made nearly $300 billion in excess profits this year by gouging us at the pump. A windfall profits tax can provide immediate relief by redirecting that money into the pockets of hardworking Americans."

From a political standpoint, Henn argued, a windfall tax is "a clear way" for Democrats to "play offense against opponents who are in the pockets of Big Oil"--an approach that progressive lawmakers such as Sens. Elizabeth Warren (D-Mass.) and Sen. Bernie Sanders (I-Vt.) have been advocating for months as Republicans continue to oppose legislation to fight corporate price gouging.

"President Biden is right," Sanders tweeted Monday. "At a time when Exxon, Shell, and Chevron increased their profits by 168% to $81 billion in the last two quarters by charging outrageously high prices at the pump, we need a windfall profits tax. The revenue should go directly back to the American people."