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Obama Proposes New $10 Oil Tax

Obama Proposes New $10 Oil Tax

The cost of which he knows full well will be passed on to consumers

In his last year in office, Obama promised to be more bold (reckless?) in pushing his agenda, and one thing that has long irritated him about our great country is our consumption of oil.

To address this pet peeve of his, Obama has released a budget in which he proposes a $10 per barrel tax hike on oil; the money, he says, will go to boost the failed “green” energy economy for which he’s long pined.  Never mind his embarrassing and costly past plans to boost the green energy sector.

The Hill reports:

President Obama will propose a $10-per-barrel fee on oil production to fund a new green transportation plan, the White House announced Thursday.

The proposal would go toward a $32.4 billion annual push to green the transportation sector by funding public transit, an urban planning initiative and clean vehicle research, the White House said in a fact sheet. Obama will include the plan in the budget request he releases next week.

This is, of course, tied to Obama’s bizarre focus on the heavily debunked myth of anthropomorphic global warming climate change.

The Hill continues:

[T]he proposal represents a new front in Obama’s climate change end-game: After finalizing carbon reduction regulations for the electricity sector last year, he is turning his attention back to the transportation sector, which accounts for 30 percent of American carbon emissions every year.

“The president’s plan does what we need to once again have a transportation system that is a source of American strength while at the same time taking steps to reduce carbon emissions and fight climate change,” Jeff Zients, the director of the National Economic Council, told reporters Thursday.

Charging the fee to oil companies, the White House said, is both a funding mechanism for the transportation initiative and an incentive for the private sector to move toward cleaner fuel.

“By placing a fee on oil, the president’s plan creates a clear incentive for private sector innovation to reduce our reliance on oil and at the same time invests in clean energy technologies that will power our future,” the White House’s fact sheet said.

This all sounds good—at least to Obama’s base.  However, the reality is that any tax on oil companies will be passed on to the consumer.  This is not a tax on oil companies; it’s a tax on the American people.

And Obama knows it.

Watch then-Senator Obama explain how companies pass on the cost of his proposals to consumers:

Of course in 2008, before he was chosen by Obama to be Energy Secretary, Steven Chu made the famous comment that we “have to figure out how to boost the price of gasoline to the levels in Europe.”  As Newt Gingrich pointed out at the time, that’s about $9 or $10 per gallon.

This current five-year proposal for increasing taxes to reach $10 per barrel indicates that Obama has not abandoned his desire to see energy prices “skyrocket” and to do so “gradually.”


The Hill reports that the proposal is “dead on arrival” in the Republican-led House:

But Obama’s oil fee plan will likely fail in Congress, where Republicans have looked to both support the oil industry and prevent new taxes and fees proposed by Democrats and the Obama administration.

“President Obama’s proposed $10 per barrel tax on oil is dead on arrival in the House,” Majority Whip Steve Scales (R-La.) said in a  statement. “The House will kill this absurd proposal, and instead focus on lowering costs and growing our economy.”

Let’s hope they do kill it; such a tax will hit the already struggling middle classes particularly hard.


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If we want to stop this, the number to keep repeating isn’t $10/barrel — it’s 50 cents a gallon. (The internets tell me that about 20 gallons of gasoline are made from a 42 gallon barrel of crude oil, with a bunch of other products as well.)

Say it with me: $0.50/gallon.

(Or focus on the +30% boost to everyone’s heating bill this winter…) (Crude’s at about $30/barrel I think.)

Total nonstarter. Would love to see someone get a straight yea-or-nay from Hillary and Bernie on this one, though.

    Merlin in reply to clintack. | February 5, 2016 at 9:39 am

    Bernie will love the idea. Hillary will wait until her polling shows that Dem voters love that Bernie loves Obama’s new idea. Then Hillary will claim to have loved it before Bernie. Love all around.

    I feel old, because I can remember the ‘Dole Dime’ when Robert Dole (our Kansas senator) was behind a ten cent per gallon gas tax. He caught holy heck for that from both sides of the aisle.

    …outflank them.

    I actually like the idea… in fact lets get rid of the IRS and fund everything by taxing goods as they are sold.

Oil prices are currently hovering around $30/barrel — and he wants to add a $10 (33%) tax? Yikes!

He’ll find a way to implement it by executive action.

casualobserver | February 5, 2016 at 9:25 am

This is the tried and true method to generate “revenue” from oil and fuels. It isn’t just the federal pick-pockets either, it’s state pocket artists, too. Add the tax when the price is low and the uninformed don’t know why the really cheap fuel just went up a little. When it gets really expensive again the reaction is already cast in stone – blame the evil, greedy, corrupt oil companies that are always “trying to make a buck on the backs of middle America”. Never mind that bushels of money go to government coffers from fuels.

That dog won’t hunt. It’s just more boob-bait for the Collective. Who are boobs. Who get baited…

Henry Hawkins | February 5, 2016 at 9:43 am

Bet on it – if the American people enjoy a windfall, in this case gas prices dropping below $2 per gallon, the Democrats will try to tax it.

Let’s hope they do kill it…

Remember the good old days, when there wasn’t a need to say ‘Let’s hope’ the Republicans will do the right thing?

anthropomorphic global warming

Just a tiny correction: Anthropogenic, not anthropomorphic 😀

A tax on a barrel of oil is stupid. However, an import/export duty on a barrel oil would be brilliant. That would generate revenue, cause the oil companies to use only domestically produced oil, and would generate income for the Govt.

However, I would prefer that income be applied to the national debt.

    Ragspierre in reply to BiggBear. | February 5, 2016 at 10:25 am


    Any “duty” IS a TAX.

    Conservatives DO NOT advocate flucking with the markets. Ala “…cause the oil companies to…” DO ANY FLUCKING THING.

    I wonder. I really do…

    casualobserver in reply to BiggBear. | February 5, 2016 at 10:43 am

    Import tariffs rarely work especially in massive global markets. Even though Trump and his supporters may get excited about the idea. We tax theirs, they tax ours. Granted he have a strong position in production, but the next 3 that dwarf us – Saudi Arabia, China, Russia – would never sit still for it.

    and would generate income for the Govt.

    You do know where that extra “income for the government” would be coming from, right? Making oil more expensive makes oil more expensive.

    Yes, a scary foreign country (Canada) is our largest supplier of both crude and petroleum, but whack a huge tax on that and it’s not Canadians who’d be handing over more money to the US government… it’s us.

A lot of European countries do this as well. Canada has a gas tax. It’s not unusual elsewhere. American Exceptionalism.

    Paul in reply to GrantS. | February 5, 2016 at 11:09 am

    A lot of other countries do stupid shit and destroy their economies.

    Didn’t your momma ever ask you “if everybody else jumped off a bridge, will you too?”

    This is just another way for the Dims to extort money from the productive part of the economy to redistribute to their “green” cronies which eventually winds up back in the pockets of the Dim pols in the form of kickbacks….err…. contributions.

    Ragspierre in reply to GrantS. | February 5, 2016 at 11:15 am

    Is it news to you that we have Federal and state taxes on gasoline for hiway use?

    Wholly crap…!!!

    Rick in reply to GrantS. | February 5, 2016 at 11:23 am

    Remarkable comment.

    MaggotAtBroadAndWall in reply to GrantS. | February 5, 2016 at 12:48 pm

    Americans have chosen to finance our roads with user fees. Mostly federal and state taxes on gasoline and diesel sold at the pump, but also by toll roads. Both parties have supported this arrangement because what can be fairer than making the people who use the roads the most pay for their construction and maintenance, which is exactly what a gas tax and toll tax does?

    Now Obama wants to make the people who use the roads pay for clean energy boondoggles that enrich Democrat cronies in “clean energy”.

    Your party is disgustingly corrupt.

    A lot of European countries do this as well. Canada has a gas tax. It’s not unusual elsewhere. American Exceptionalism.

    If only America, too, had a gas tax! That would solve everything!

    Oh, wait.

[S]uch a tax will hit the already struggling middle classes particularly hard.

The middle class … and the entire industrial economy.

Love it or hate it, the health of the entire economy depends on the price of fuel. Skyrocketing fuel prices cause skyrocketing shipping prices, and when you have to ship raw materials to be refined, and then ship refined materials to be machined, and then ship machined materials to be assembled into final products, and then ship final products to their buyers and/or retailers, that’s a crap-ton of transportation, and it gets recursively more expensive if the price of fuel goes up.

Not to mention, this is being done ostensibly as a measure to benefit public transit. News flash: public transit uses fuel, too. Care to guess who’s going to end up on the hook for the extra costs incurred?

Yep, the urban lower class, who are more likely to depend on public transit to get to whatever jobs they can find.

Yet more proof that “Progressives” and socialists either a) don’t understand basic economics, or b) understand and actively try to hamstring American productivity.

MaggotAtBroadAndWall | February 5, 2016 at 12:36 pm

A commenter at Judith Curry’s blog linked to this parody video clip today. I have to say, it is pretty much spot on:

The legislators in my state are bemoaning the expected drop in oil and gas revenues and trying to figure out how to make up for the shortfall. By shortfall, I mean they only project 30 million in “new” spending over last year’s budget. The democrats are proposing a 5 cent a gallon tax hike so they can continue growing government in a poor state. They are absolutely insane.

I commute 4 hrs/day, 4 days a week. If this tax got me a wider freeway to cut that in half, I’d be fully onboard with this. As it is I’m pricing up buying a helicopter to cover that 70 miles.

I pay truck loads of income tax while 47% of this country doesn’t pay jack. Let the “poor” (who all drive newer and nicer cars than I do BTW) pay their freaking share.

Since this won’t get me a wider freeway, I don’t support it. They’ll eff off with the money to make a case for …er I mean “study” climate change and high speed rail boondoggles.

    MacsenMcBain in reply to Andy. | February 5, 2016 at 3:40 pm

    I’m sure not all of the money will be wasted on green energy boondoggles – some of it will probably go to buy shiny new hybrids for the (D) elected officials and public sector union types who run the big cities.

High energy prices, in this Administration, is a feature, not a bug.

The Hill reports:

President Obama will propose a $10-per-barrel fee on oil production….

The proposal would go toward a $32.4 billion (annual democratic voter fraud slush fund and payoff to big democratic donors) the White House said in a fact sheet. Obama will include the plan in the budget request he releases next week.

Edited the copy to reflect the real reason for taxing oil.