With the average price of unleaded regular gasoline hovering at $1.75 per gallon, American consumers finally have something to crow about. But this economic good news will evaporate if President Obama has his way.
The president’s new budget proposes to add a $10 tax on every barrel of oil to fund green transportation initiatives. The revenue would be spent on mass transit, high-speed rail and vehicle research to reduce carbon dioxide emissions and save the planet. The tax supposedly would generate $32.4 billion a year from the oil companies.
By raising the specter of Big Bad Oil, perhaps the president and his advisors assume the American public will acquiesce to this kick in the fender. But that could occur only in the president’s parallel universe.
Consumers are smarter than the White House thinks. They know taxes on oil are paid by everyone who either drives a car, ships merchandise by truck, travels by air, or uses oil for myriad consumer items from running shoes to aspirin. The oil industry says the tax would raise the cost of gasoline by 25 cents a gallon.
Obama’s oil tax will never see the light of day. Several members of the Republican-controlled Congress have pronounced it “dead on arrival.” Sen. John Barrasso, R-Wyo., called it “another tax on the middle class” and said Congress would “reject it.” House Speaker Paul Ryan, R-Wis., said the proposed tax is “little more than an election-year distraction” and is based on the president’s “out-of-touch climate agenda.”
Obama’s insult to conventional energy and to consumers is reminiscent of $72 billion BTU tax proposed by President Clinton and Al Gore back in 1993. It was mercifully abandoned, joining the previously considered and discarded carbon tax.
Americans are not keen on giving more money to the government. Nor does it make sense to penalize the most efficient, consumer-chosen energies to subsidize inferior substitutes. Even in Iowa, the nation’s biggest corn-producing state, voters are no longer enamored with so-called green energy. Sen. Ted Cruz won the GOP caucuses handily after calling for an end to the ethanol mandate.
So why would the president propose an oil tax after Iowans repudiated the government’s best hope of replacing gasoline with a homegrown fuel? Probably because the tax is not a sincere effort. Rather, it is aimed at convincing the Big Green Tom Steyers of the world to invest more cash in Democrat campaign coffers.
The proposed oil tax certainly is consistent with other anti-fossil fuel policies foisted on the public by this president. He rejected the Keystone XL pipeline on specious environmental grounds. He championed the Clean Power Plan, which seeks to remove coal from the U.S. economy and force the states to move toward solar and wind power. He has used regulations to make oil and natural gas development more difficult and costly.
In his first term President Obama also pushed the stimulus package through Congress, which contained billions of taxpayers’ dollars in subsidies for clean energy. And then there was the cap-and-trade plan, rejected by Congress, which would have sharply raised energy costs.
For the average American, the oil tax is a terrible idea. Compare it to taxing FedEx to send money to the U.S. Postal Service, or charging families to visit their local parks so more can be spent on offshore sanctuaries.
The oil tax is the president’s most cynical and perverse attempt yet to force his will on American taxpayers. No matter how you dress it up with platitudes about protecting future generations, the oil tax is crony capitalism at its worst.
Robert L. Bradley Jr. is CEO of the Institute for Energy Research and the author of seven books on energy history and related public policy. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
