President Biden will propose a “windfall” tax on oil companies Monday for banking record profits amid elevated prices at the pump that have hurt Democrats badly in midterm election polling — though the proposal stands no chance of passing Congress soon.

Biden’s windfall tax proposal aims to shift blame for voters’ economic frustrations from the White House after the release of third-quarter earning reports showing major companies like Exxon and Chevron riding high as Americans struggle to fill their tanks.

Voters have given Biden poor marks on his management of the economy, dragging on Democrats going into the Nov. 8 polling.

The worst inflation since 1981 has caused the costs of food, transportation and housing to jump 8.2% over 12 months. The Federal Reserve’s interest rate hikes this year, meanwhile, have increased the costs of consumer borrowing, including for mortgages

The precise details of Biden’s plan are unclear. His intention to call for the special tax on corporate profits was reported by multiple news outlets.

Exxon Retail Gas Location.
The proposal is directed at oil companies like Exxon.
Shutterstock / Jonathan Weiss

Exxon, the largest US oil company, reported $19.7 billion in profits from July through September, up 10% from the second quarter of 2022. Chevron, the second-largest US oil company, reported $11.2 billion in profit, slightly less than in the company’s prior quarter.

Exxon said its third-quarter earnings were $5.3 billion higher than in the third quarter of 2021 “due to stronger industry refining margins, positive derivative mark-to-market effects and higher volumes.”

In the third quarter, Exxon spent $3.7 billion paying dividends to shareholders and $4.5 billion on buybacks that can increase stock value.

Chevron Corporation Signage Logo on Top of Glass Building. Workplace of Gas and Oil Company in High-rise Office Headquarters.
Oil is still at high prices, despite dropping since June.
Shutterstock / askarim

The average cost of a gallon of regular gas in the United States is $3.76, lower than all-time highs over $5 in June, but still up significantly from $3.40 at this time last year, according to AAA data.

Just 16% of voters said the economy is either “excellent” or “good” in a CNBC poll released this month and 59% said they expected a recession.

That poll found just 40% of voters approve of Biden’s handling of the economy, though that figure was up 10 percentage points from an abysmal 30% in July.


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