WASHINGTON — Legislation introduced in the Senate would impose an "excess profits" surtax on major oil companies that lawmakers charged had gained an unseemly windfall because of the Persian Gulf War.
The bill, sponsored by Sens. Howard M. Metzenbaum (D-Ohio) and Joseph I. Lieberman (D-Conn.), would tax at a rate of 40% profits of large oil companies that exceed the average profit for the preceding five years.
Sponsors said the tax, which would take effect for the 1990 tax year, would leave oil companies with 60% of the profits above the five-year average.
Metzenbaum said Tuesday that the surtax would apply only to about 30 major oil companies with 1% or more of oil production, reserves, refining capacity or product sales. He said it would not cover independent drillers and oil entrepreneurs who have suffered during the industry downturn.
Metzenbaum said the bill was needed due to the "extremely troubling and offensive" profits racked up by oil companies in the last three months of 1990, ranging up to 300% higher than the same period in 1989.
For example, Metzenbaum said Exxon's and Amerada Hess's profits for the last quarter of 1990 were up 300%, while Chevron's had gone up 250%.
"I have nothing against a company making a profit," Metzenbaum said, "but this is different.
