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Share repurchase taxes should be quadrupled to punish Big Oil for their “outrageous” profits, President Biden said in remarks to this year’s State of the Union address.
“You may have noticed that Big Oil just reported record profits. Last year, they made $200 billion in the midst of a global energy crisis,” the U.S. president said. “It’s outrageous.”
He then went on to say that instead of using these profits to invest in more oil production and keep fuel prices down, energy companies were using them to buy back stock, “rewarding their CEOs and shareholders.”
The President then proposed that to rectify this sub-optimal state of affairs, oil companies should face quadruple taxes on share repurchases and added that “They will still make a considerable profit.”
This is the latest in a series of attacks on Big Oil coming from the White House, as the Biden administration appears to see the industry as the sole party responsible for movements in retail fuel prices as long as these movements are upwards.
Last year, the President threatened the industry with a windfall profit tax and accused it of war profiteering because most U.S. oil producers have become careful with their spending plans, giving strong signals that production growth is not their number-one priority.
Biden also threatened “other restrictions” that he did not specify as the oil industry remained stubborn in its refusal to heed calls for more investments in new production. Energy executives have repeatedly said there are obstacles to such a strategy, including inflation and the Biden administration’s own energy policies that are heavily subsidizing a shift away from fossil fuels.
At the same time, industry insiders have said, the White House is making it harder for any new production to come online with a complex permitting process that compromises the economic viability of some projects.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.