The huge windfall profits dropping in the laps of the major integrated oil companies - Exxon/Mobil alone reported a $9.9 billion profit for the third quarter - are the result of relentless and painful squeezing of American consumers, and of forces that have nothing to do with a free market.

These astounding profits are on top of profits a year ago, when $40-a-barrel prices were already establishing records for corporate profit. Now oil sells for about $60 a barrel. It has recently been as high as nearly $70 a barrel. By any measure, this year's profits are stunning.

What are the major integrated oil companies doing with all those billions? According to their own reports, they are buying back their own stock, hoarding cash, and looking for new mergers and acquisitions - "digging for oil on Wall Street," as BusinessWeek put it.

What's happening is unfair and painful for millions of American consumers.

I propose levying a 50% excise tax on windfall profits (defined as revenue from oil prices over $40 a barrel) by the major integrated oil companies, with all revenues rebated directly to consumers whose pain has been the source of big oil's gain.

But the big oil companies could avoid the tax if they use their windfall profits to explore for more oil or build new refineries. Regrettably, that is not what they are now doing with their windfall profits.

My legislation is a pretty powerful incentive to do the right thing!

If big oil companies aren't willing to make those kinds of investments with their easy money, then it makes sense to require them to return at least a portion of it to consumers.

Profits are what fuels corporate America. I'm all for them. But outrageous profits, squeezed from consumers caught in a market rife with manipulation, is not what American business is all about.

We have an obligation to insist on what's right for American consumers.

Sen. Byron Dorgan,  D-N.D., chairs the Democratic Policy Committee.

Commentary:
Giving the money back to consumers is nice but it's be smarter to use the money to bring down the record deficits caused by tax cuts. I don't see how you give every gas user a rebate. In fact, I think it's kinda silly. It's more likely the purpose of this so-called windfall tax is to get big oil to do something with their profits OTHER than giving it to the GOP for their reelection campaigns.

Tax increases tend to increase investments (recall the tax increase under President Clinton and the resulting investment led super boom). Tax cuts have always hurt the economy in the long run After fiver years of tax cuts, the Dow is lower than it was before Bush became president. Under President Clinton the Dow increased 1,000 points a year (on average). Tax cuts (and surpluses) are good for the economy - no matter how many times you hear otherwise.