Obama to propose $10-a-barrel oil tax to fund rail and highway projects
President Obama is proposing a $10-a-barrel oil tax, phased in over five years, to pay for a variety of transportation initiatives, including new rail corridors, highway projects, pilot projects for self-driving cars, and other technologies it said fall under the goal of a “clean transportation” system.
The White House announced Thursday that the budget presented to Congress next week would include an “oil fee” that would raise “the funding necessary to make these new investments, while also providing for the long-term solvency of the Highway Trust Fund to ensure we maintain the infrastructure we have.”
Such fuel taxes have generally been hailed by economists and energy experts as economically sensible — but politically toxic.
Republican congressional leaders were quick to condemn it. “Once again, the president expects hardworking consumers to pay for his out of touch climate agenda,” House Speaker Paul Ryan said in a statement. He said it was “little more than an election-year distraction” and that it would be “dead on arrival in Congress.”
Senate Finance Committee Chairman Orrin Hatch (R-Utah) said “this is a backdoor gas tax hike and it’ll be hard-working American families that will have to foot the bill every time they go to the pump.”
The oil tax, which would work out to about 24 cents a gallon when fully in place, would create incentives for the private sector to use oil products more efficiently, thus reducing the amount of climate-changing carbon dioxide released into the atmosphere. Such a tax has even been supported by a handful of oil industry executives.
Jeff Zients, director of the White House National Economic Council, said that the tax would be paid by oil companies, but the companies would inevitably pass most or all of the tax to consumers of gasoline, diesel and heating oil. Zients said that the fee would apply to imported crude and petroleum products, but not to U.S. petroleum exports — to prevent U.S. producers and refiners from being put at a competitive disadvantage in foreign markets.
Zients did not say how much revenue the new tax would generate, but at the current rate of oil consumption, about 19 million barrels a day, the tax would raise about $65 billion a year when fully phased in.
this is really just another CO2 tax by stealth..the oil companies will wear it and if you think they wont pass it onto consumers you are insane..
“the companies would inevitably pass most or all of the tax to consumers of gasoline, diesel and heating oil.”
how much per year?
“the tax would raise about $65 billion a year when fully phased in.”