Former President Bill Clinton’s Treasury Secretary Larry Summers is taking issue with President Joe Biden’s windfall oil tax plan warning.
“I’m not sure understand the argument for a windfall profits tax on energy companies. If you reduce profitability, you will discourage investment which is the opposite of our objective,” Summers tweeted on Tuesday.
He added, “If it is a fairness argument, I don’t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years.”
If it is a fairness argument, I don’t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years.
— Lawrence H. Summers (@LHSummers) November 1, 2022
On Monday, Biden lashed out at the major oil companies while speaking to reporters after they reported an increase in profits.
The president warned the companies to use the money to increase the supply in oil or return it to consumers through price reductions.
“If they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions,” Biden said.
He added, “My team will work with Congress to look at these options that are available to us and others. It’s time for these companies to stop war profiteering, meet their responsibilities to this country, give the American people a break and still do very well.”
Last week, The New York Times reported Exxon Mobil and Chevron declared a fourth consecutive quarter of “robust profits.”
The newspaper pointed out, in part, the “bonanza reflected a surge in oil and natural gas prices after the Russian invasion of Ukraine scrambled global energy markets.”
The president recently received criticism for claiming gas prices hit $5 a gallon when he entered the Oval Office.
“And because of the action we’ve taken, gas prices are declining. We’re down $1.25 since the peak this summer and there been falling for the last three weeks as well, and adding up real savings for families today. The most common price of gas in America is $3.39, down from over five dollars when I took office,” Biden said while delivering remarks in Syracuse, New York.
Fox News noted the average price for a gallon of gas on January 2021, the same day Biden took office, was roughly $2.39, citing AAA.