Obama’s Oil Tax

obama oil

US President Barack Obama is planning to propose a special $10 per barrel tax in the 2017 budget plan. The funds would be used to finance much-need infrastructure projects, as well as clean energy initiatives.

The White House announced it will use the $10 per barrel oil tax to help pay for the $300 billion worth of investments in mass transit, high-speed rail, self-driving cars, and other transport projects over the next ten years.

It would in theory also help the US reduce its dependence on foreign oil.

The document didn’t specify whether the $10 tax would be directly levied on oil companies or customers buying gasoline. Either way, it would likely be passed onto the consumer: the oil industry estimates it would raise the price of gasoline by 25 cents.

High fuel prices triggered by the 1979 oil crisis inspired new more energy-efficient cars and technologies, but also delivered a swift financial blow to consumers. The last time the gasoline tax was raised was in 1993 under President Bill Clinton. The current gas tax is 18.4 cents per gallon, the level it has been at since 1993.

So far this is just a headline. The proposal will be “dead on arrival” say the Republicans, who control the Congress. Obama, who has less than one year in office, likely included the idea to inspired more energy debate among the current presidential candidates.