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Thursday, February 11, 2016

President Obama Proposes a New $10 Per Barrel Fee on Oil

From Forbes:
According to a White House fact sheet, President Obama’s lame duck federal budget proposal will include a $10 per barrel “fee” on oil. The proceeds, some $40 billion a year, would be directed toward a grand “21st Century Clean Transportation System” that includes shoring up the federal highway fund, building mag-lev trains, charging stations for electric vehicles, self-driving cars and other lower-carbon transportation boondoggles. 
Congressional leaders have declared the president’s entire budget dead on arrival. But the plan, revealed on Thursday, nonetheless sent perturbations rippling throughout the oil industry. The so-called “fee,” which is just doublespeak for a tax, would at least be levied equally on both domestic and foreign supplies, so as to “ensure a level playing field,” according to a White House official. In a rational world, the White House would strive to tilt the playing field in favor of American companies. But in this case it’s just a relief that the tax wouldn’t be imposed only on domestic oil. 
Seems like a good time for a tax on oil, no? The stuff is $30 a barrel. Gasoline $1.50 a gallon (here in Texas anyway). And there hasn’t been an increase to the 18 cents per gallon federal gasoline tax in nearly 35 years. Naturally the White House would never dream of casting this as an additional gas tax. Such use taxes are regressive — they hit the little guy more than the big guy. So of course this fee would stick it to the evil oil companies. Nevermind that Big Oil will just pass along the tax, about 25 cents a gallon, onto motorists.
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