Congress taxes oil windfall profits, returns cash to drivers quarterly
H.R. 7960 — Big Oil Windfall Profits Tax Act · Filed by Ro Khanna (D-CA) · 26 cosponsors · Introduced Mar 17, 2026 · Referred to committee
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What it does
This bill imposes a new federal excise tax on crude oil extracted or imported by large oil companies (those handling over 300,000 barrels daily), set at 50% of the amount by which the quarterly average price of Brent crude exceeds the 2025 baseline price. Revenue from this tax funds a rebate program that returns money to individual taxpayers quarterly based on gasoline prices, with joint filers receiving 150% of the rebate amount and income-based phase-outs above $75,000–$150,000 depending on filing status.
Why we flagged it
The bill's core function is to tax excess oil-industry profits above a 2025 baseline and redistribute that revenue directly to consumers via quarterly gasoline-price rebates. This is a redistributive tax-and-transfer mechanism, not a simple excise tax or price control.
What the text implies
- The rebate amount is determined by the Secretary quarterly based on actual tax revenue and eligible individuals, creating administrative discretion and potential delays in rebate distribution that may lag price spikes.
- Joint filers receive 150% of the rebate amount, creating a marriage-bonus incentive that may distort household formation decisions and raises fairness questions for single filers.
The full analysis lists 5 implications of this text.
Who stands to gain
Individual taxpayers (especially lower-income and joint filers); Gasoline consumers during high-price periods