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Biden ally proposes a 21% surtax on oil profits to reduce inflation.

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To combat inflation, a Biden ally proposes a 21% surtax on oil profits.

The White House considers an oil profit tax, but is concerned about the impact on supply.

The proposal of an Oregon senator is likely to face united GOP opposition.

Under a plan developed by a key senator, oil companies with profit margins greater than 10% would face a new federal surtax, as Democrats and the White House struggle to reduce US energy costs and broader inflation.

According to two people briefed on the proposal, Senator Ron Wyden, an Oregon Democrat who chairs the tax-writing Finance Committee.

Would subject oil companies to federal taxes of up to 42 percent on profits considered excessive – the 21 percent US corporate tax rate plus a new 21 percent surtax.

Wyden has yet to make his plan public, and he’ll almost certainly need the support of all 50 Democrats in the Senate to overcome Republican opposition.

He is one of several Democratic lawmakers, including Senator Sheldon Whitehouse and Representative Peter DeFazio, who have discussed targeting excessive oil-company profits.

In recent weeks, top Biden aides have been looking for any and all ideas to combat rising energy costs ahead of the November midterm elections.

The proposal is unlikely to become law by the fall, but its introduction provides Democrats with a platform to show voters how they would handle inflation with larger congressional majorities.

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