On Tuesday, former President Bill Clinton’s Treasury Secretary Larry Summers criticized President Joe Biden’s plan to tax the windfall profits of major oil companies on Twitter.
Biden threatened to work with Congress to tax the “outrageous” profits of energy producers during a Monday speech after Exxon Mobil and Chevron posted massive quarterly profits on Friday. However, Summers, who also worked in the Obama administration, said that Biden’s plan does not make sense, as it would decrease profits and reduce investment in the industry, exacerbating current energy shortages.
“If you reduce profitability, you will discourage investment which is the opposite of our objective,” Summers wrote. “If it is a fairness argument, I don’t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years.”