Democrats propose bills to send gas payments to Americans, some funded by taxing oil companies

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Democrats in Congress, fearful of pain at the pump when voters head to the polls in November, are pushing a variety of proposals that would send direct payments from the government to Americans to help cover skyrocketing gas prices over the past year.

Democrat Reps. Mike Thompson, John Larson, and Lauren Underwood are proposing a plan similar to the COVID relief payments sent to Americans during the pandemic that would send $100 per month to individuals each month the national gas price exceeds $4 per gallon. In the bill, couples would receive $200 plus $100 for each dependent.

LOS ANGELES, CA – MARCH 13: Gas prices in Westchester are above $6 as prices at the pump continue to rise across the Southland on Sunday, March 13, 2022, in Los Angeles, CA.  (Jason Armond/Los Angeles Times via Getty Images / Getty Images)

LOS ANGELES GAS PRICES HIT AVERAGE OF $6

"Americans are feeling the impact at the pump of Vladimir Putin’s illegal invasion of Ukraine, and right now we must work together on commonsense policy solutions to ease the financial burden that my constituents are feeling," Thompson said in a statement. "The Putin Price Hike is putting strain on our economy, and I am proud to be working with Reps. Larson and Underwood to introduce this legislation to provide middle-class Americans with monthly payments to ease the financial burden of this global crises."

Thompson’s statement did not mention how the bill would be paid for.

"Congressman Thompson is committed to finding a way to ensure Americans don’t face higher gas prices as a result of Putin’s illegal invasion," a spokesperson for Thompson told Fox Business. "He is working with the committees of jurisdiction and Congressional leadership to find a pay-for that covers the cost of this legislation. No option is off the table to help families at the pump."

Two other bills have been proposed in Congress that do outline how gas rebates to Americans would be paid for: by taxing big oil companies.

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Gas prices are advertised at over six dollars a gallon Monday, March 7, 2022, in Los Angeles.  ((AP Photo/Marcio Jose Sanchez) / AP Newsroom)

"Big Oil will pay a one-time, 50 percent windfall profit tax on any adjusted taxable income (ATI) in 2022 that exceeds 110 percent of their average ATI during pre-pandemic levels between 2015-2019," Rep. Peter DeFazio, a Democrat, said in a press release about his "Stop Gas Price Gouging Tax and Rebate Act" which calls for a windfall tax on corporate profits deemed excessive that would be returned to consumers as a tax rebate.

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A third bill is sponsored by Democrats Rep. Ro Khanna and Sen. Sheldon Whitehouse. 

"The Big Oil Windfall Profits Tax would provide consumers guaranteed relief while maintaining American competitiveness and reducing pressure on inflation by attacking corporate profiteering," the press release for the bill reads. "Under the Khanna/Whitehouse bill, large oil companies that produce or import at least 300,000 barrels of oil per day (or did so in 2019) will owe a per-barrel tax equal to 50 percent of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel between 2015 and 2019, a period when large oil companies were already earning large profits. The quarterly tax will apply to both domestically produced and imported barrels of oil to ensure a level playing field."

The press release added that the revenue raised from the tax on oil companies would be returned to consumers in a "quarterly rebate" that "would phase out for single filers who earn more than $75,000 in annual income and joint filers who earn more than $150,000."

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"At $120 per barrel of oil, the levy would raise approximately $45 billion per year. At this price, single filers would receive approximately $240 each year, while joint filers would receive roughly $360 each year," the press release said.

Jason Modglin, president of the Texas Alliance of Energy Producers, told Fox Business that the Democratic proposals would do little to help Americans at the gas pumps.

"This new tax raises energy and manufacturing costs adding to more record inflation with little relief for American consumers," Modglin said. "Congress should work with, not against, the President’s efforts to increase domestic oil and natural gas production."

Prices for a regular gallon of gas were $4.25 nationwide on Monday, according to AAA, up from $2.82 one year ago but down slightly from last week's level.  

One Wall Street analyst estimated that higher fuel prices could cost the average American household an extra $2,000 per year. 

None of the Democrats' proposals would reduce the federal gas tax, which amounts to a little over 18 cents per gallon of gas sold in the United States. State gas taxes also raise the price per gallon, and several governors including Maryland's Larry Hogan (R) have proposed state gas tax holidays. Hogan signed a pause on the state's gas tax last week. 

Fox Business' Megan Henney contributed to this report

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