The key impact of SB408 on state laws is the introduction of a federal-level excise tax that could influence oil production and pricing strategies among businesses engaged in the crude oil market. As this bill directly arms the Treasury with a fund known as the 'Protect Consumers from Gas Price Hikes Fund', it provides mechanisms for rebates to consumers dependent on the collected taxes. By establishing this kind of fiscal policy, the bill aims to alleviate some financial burdens on the general public due to surging gas prices, thus marking a notable shift in the taxation landscape targeting the oil industry.
Summary
SB408, also known as the 'Big Oil Windfall Profits Tax Act', introduces a new excise tax on crude oil profits, specifically targeting what are termed windfall profits. This bill imposes a tax on every barrel of taxable crude oil produced and imported, with rates determined based on the average price of crude oil over certain time periods. The intent is to raise additional revenue during fiscal periods of high oil prices when profits can significantly exceed normal rates. The mechanism also seeks to provide rebates to individual taxpayers to help offset the cost of rising gasoline prices.
Contention
However, the bill raises significant points of contention, particularly regarding its potential effects on the energy market dynamics. Critics argue that imposing such a tax could deter investment in oil production and extraction, ultimately leading to higher consumer prices in the long term. Moreover, the revenue distribution via rebates may not reach all eligible individuals, particularly those without adequate tax documentation or those who might not file federal taxes. The argument on the bill also reflects broader debates on government intervention in energy markets and the role of oil companies in a changing economic environment.
Buy Low and Sell High Act This bill revises requirements concerning the Strategic Petroleum Reserve (SPR) and sets forth provisions to reduce the demand for petroleum fuel and increase fuel supply. For example, the bill directs the Department of Energy (DOE) to establish within the SPR an Economic Petroleum Reserve of up to 350 million barrels of crude oil. DOE must also establish a national network of Strategic Refined Petroleum Product Reserves to store up to 250 million barrels of gasoline and diesel fuel, which may be sold when there is a severe fuel supply interruption within the district in which the reserve is located. In addition, the bill increases the cap on the amount of barrels of petroleum distillate that may be stored in the Northeast Home Heating Oil Reserve from two million to four million. It also establishes limits on the sale and exportation of petroleum products from such reserves. Further, the bill establishes provisions concerning electrifying the transportation sector, zero-emission vehicles, and a program to increase the amount of crude oil refined in oil refineries in certain countries in the Western Hemisphere.
FairTax Act of 2023 This bill imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income taxes, payroll taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2025, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property; for property or services purchased for business, export, or investment purposes; and for state government functions. Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines. The states have the responsibility for administering, collecting, and remitting the sales tax to the Treasury. Tax revenues are to be allocated among (1) the general revenue, (2) the old-age and survivors insurance trust fund, (3) the disability insurance trust fund, (4) the hospital insurance trust fund, and (5) the federal supplementary medical insurance trust fund. No funding is authorized for the operations of the Internal Revenue Service after FY2027. Finally, the bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this bill.
Emergency Savings Accounts Act of 2023 This bill allows an individual taxpayer occupying a residence a deduction from gross income for up to $5,000 of amounts paid into such taxpayer's emergency savings account. The bill defines emergency savings account as an account established exclusively to pay the qualified disaster and public health emergency expenses of the account beneficiary. The bill defines qualified disaster and public health emergency expenses as disaster mitigation expenses, disaster recovery expenses, public health emergency expenses, and unemployment-related expenses.