Oil Tax good or bad idea? Despite having absolutely no chance of getting it through a Republican controlled Congress (and much Democratic opposition to an extremely regressive tax), President Obama is set to announce a plan to raise money for a $300 billion investment in autonomous vehicles, high-speed rail and other mass transit alternatives.
Obama’s budget proposal next week will include a $10 per-barrel oil tax that would be put on oil companies. Now, let’s be clear about two things: oil companies will simply pass that tax on to American motorists and Hell has a better chance of hosting the Winter Olympics of any new tax, or for that matter anything proposed by Obama in his last year in an election year, passing through Congress. With oil prices at a unseen low in over a decade, now would might make some sense, but it’s not happening.
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While Congress finally passed a five-year $300 billion infrastructure spending bill in December, they failed to increase the gas tax that has been funding the Highway Bill since the early 90s despite of the fact that inflation nearly demands it.
“This is a per-barrel fee on oil paid for by oil companies,” White House economic adviser Jeff Zients told reporters Thursday. “So they’re the ones paying the fee. We recognize that oil companies will likely pass on some of these costs.”
At present prices the proposed tax would likely cost motorists less than $3.00 per 15 gallons put in their tanks, buit is also 25% higher gas at current prices and it will hit the poor and middle classes the most. It’s really not, but American’s will call for lower taxes and a reduction in the national debt in spite of the fact that the two are essentially mutual exclusive.
Oil tax would be put in over five years and further clean energy efforts
Thankfully, a number of states have taken it on their-selves to raise gas taxes in order to fund infrastructure work. But the federal government hasn’t touched the the 18.4 cent-per-gallon gas tax in more than two decades.
The United States has serious infrastructure issues and the transportation network that used to be the envy of the world, has now become a joke on a global scale.
“Our transportation system used to be a source of competitive advantage for our global economy, but today we’re at risk of it becoming an Achilles heel,” Zients told reporters yesterday.
It won’t matter, while a better time to pass the proposed tax, it’s not going to happen.