A group of Senate Republicans led by Finance Committee Ranking Member Mike Crapo (R-Idaho) held a news conference on Wednesday blasting Democrat efforts to raise taxes on American energy production that would pass costs onto consumers in the form of higher prices.
To distract voters from the Biden Administration’s refusal to increase domestic oil and gas production amid record-high gas prices, Democrats have unveiled legislation proposing a “windfall profits” tax (WPT) on American oil and gas producers. Democrats’ WPT would impose a roughly $22.50 per barrel excise tax on crude oil that would further raise gas prices for struggling consumers.
Sen. Crapo criticized the planned tax hike as a “gimmick” and part of “an effort to tax American producers if they increase their production.”
“They [oil and gas companies] don’t control the price of oil,” Crapo continued. “They control the amount of their production. If they try to get back in the game, the proposal is to tax them, which will simply drive the price of gas up higher.”
Crapo’s criticism is well merited. The concept of an oil windfall profits tax is a tried and failed policy from the Carter Administration which reduced domestic oil production by as much as 8% and caused U.S. dependence on imported oil to increase by as much as 13% from 1980 to 1988, according to the Congressional Research Service.
Republicans also lambasted calls from Democrats to temporarily suspend the federal gas tax until after the midterm elections.
Senator John Barrasso (R-Wyoming) labeled a gas tax holiday as a “band-aid on a bullet hole” that would only lower gas prices only until after the election when Democrats would reimplement the tax.
You can view the full press conference here.