Jimmy Carter's energy policy once put Americans in gas lines for hours.
Senate Democrats just dug up his worst idea and dusted it off.
A bill sitting in Congress right now would resurrect the exact scheme Democrats themselves buried in 1988.
Whitehouse and Khanna Push Big Oil Windfall Profits Tax As Gas Prices Already Crash
Sen. Sheldon Whitehouse and Rep. Ro Khanna reintroduced the Big Oil Windfall Profits Tax Act this year – and they're blaming Trump for why they need it.
The bill slaps a 50 percent tax on the gap between this year's oil price and last year's.
It hits any company producing 300,000 barrels a day or more.
The bill exempts smaller producers, who account for roughly 70 percent of domestic output – meaning the tax targets a narrow slice of the industry while claiming to fix the whole market.
Whitehouse says the money is needed because Trump's handling of Iran sent gas prices soaring and "money flowing to his Big Oil donors."
Oil prices already crashed back near pre-war levels weeks ago.
U.S. crude settled around $71 a barrel by late June – just a few dollars above where it sat before the war started.
The national gas average fell to $3.90 a gallon, down from a peak above $4.50.
Whitehouse wrote this bill for a crisis that's already over – the same tax Democrat socialists have been hunting to revive since 2022.
Jimmy Carter's Windfall Profits Tax Already Failed Once Before
Carter signed his version of this tax in April 1980. He promised it would punish oil companies and protect ordinary Americans.
It did neither.
The nonpartisan Congressional Research Service found the tax slashed domestic oil production by up to 8 percent. Foreign imports jumped by as much as 13 percent in response.
Carter's tax was projected to raise $393 billion. It raised about $80 billion before a Democrat-controlled Congress killed it in 1988.
The tax was so complicated that a 1984 government audit called it the largest and most complex tax ever levied on a single American industry – with separate rates depending on the type of oil, the age of the well, and whether the producer was an independent or a major.
Energy policy consultant David Blackmon spent his career studying Carter's original law. He doesn't sugarcoat it.
He called it "an absurd law" that punished small producers and royalty owners "far more than the Big Oil companies."
Blackmon predicted Khanna's bill would be "revealed as a legislative fraud" the same way – and pointed to something bigger driving it.
He called the bill "no surprise given the current socialist surge happening within the Democrat party."
Trump Orders DOJ Investigation Into Gas Price Gouging Instead
Whitehouse and Khanna wanted a permanent excise tax. Trump took a different swing entirely.
He ordered the Department of Justice to investigate oil companies directly.
"Those prices are dropping like a rock," Trump wrote on Truth Social. "In other words, customers are being gouged."
No new tax. No permanent bureaucracy. Just a direct order to find out who's ripping off the American driver.
That's the split-screen moment that defines both parties right now.
Trump targets the companies he believes are gouging customers. Whitehouse and Khanna want a permanent tax that history already proved gets passed straight down to the consumer.
The American Petroleum Institute didn't hold back either. Windfall taxes "deterred investment and reduced production" the last time Washington tried this stunt.
The U.S. Chamber of Commerce called it "terrible precedent" – a tax that shrinks the very oil supply Democrats claim they're protecting.
Blackmon already called this outcome – a repeat of the same fraud, on the same industry, with the same losers.
Forty-six years later, and the Democrat party still can't come up with anything better than Jimmy Carter's busted tax code. That's not a policy platform. That's a party out of ideas, raiding a 1980 file cabinet for something, anything, to put their name on.
Khanna and Whitehouse are betting voters don't remember the gas lines that wrapped around city blocks the last time Washington tried this.
Sources:
- Spencer Lombardo, "Democrats try to grave-rob Jimmy Carter's oil tax," Daily Caller News Foundation, June 2026.
- Brett Wilkins, "Big Oil Windfall Tax Would Return 'Egregious' Iran War Profits to Struggling US Families," Common Dreams, March 2026.
- "Trump accuses oil companies of gas price 'gouging,' calls for DOJ probe," NBC News, June 2026.
- "President Trump alleges gas price gouging, calls for DOJ investigation," Fox Business, June 2026.
- "Democrats Attempt to Revive Disastrous 'Windfall Profit' Tax," Americans for Tax Reform, May 2026.
- "A Windfall Profits Tax Would Reduce Energy Production When We Need It Most and Raise Prices in the Long Run," U.S. Chamber of Commerce.
- "Crude Oil Windfall Profit Tax Act of 1980," Congressional Research Service (EveryCRSReport.com).