Enact windfall profits tax for oil companies

Low gas prices have stalled windfall profits tax on oil companies

Updated: Tuesday, March 10th, 2009 | By Angie Drobnic Holan

Back in the summer of 2008, gas prices were at record highs. The national average for a gallon of unleaded hit a record of $4.11 on July 17.

Barack Obama, then a candidate, argued for a windfall profits tax on oil companies.

"I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills," Obama said in a speech that summer.

But since then, gas prices have declined. A gallon of unleaded cost $1.94 in March 2009.

So these days, President Obama doesn't talk about the windfall profits tax. It didn't make it into the budget outline he released on Feb. 26, 2009. No one in Congress has introduced legislation to enact it. (In 2008, there were at least seven windfall profits bills.)

That's not to say that Obama has abandoned all energy taxes. His budget outline includes a cap-and-trade policy that would require carbon emitters to pay new fees (Promise No. 456 ), as well as proposals to revoke other tax deductions for oil and gas companies (Promise No. 2 ).

But we've seen nothing to indicate Obama intends to pursue a windfall profits tax anytime soon. If Obama was serious about this one, it seems likely it would have been in the budget outline. For these reasons, we rate this promise Stalled.

Sources:

AAA, Fuel Gauge Report , accessed March 10, 2009

Library of Congress Thomas legislative database

Office of Budget and Management, Budget Documents for Fiscal Year 2010 , Feb. 26, 2009