Just as Americans are getting a little long-needed economic relief in the form of falling fuel prices, President Barack Obama is proposing a massive hike in taxes on oil producers. Analysts say end consumers are going to bear the brunt of the tax hike.
The initial tax proposal calls for a new $10 per barrel tax to fund Obama’s clean energy agenda. The administration has worked to downplay the effect on end consumers by describing the tax as a “fee” on mega rich oil producers that will help pay for $300 billion in green infrastructure improvements.
“This is a per-barrel fee on oil paid for by oil companies. So they’re the ones paying the fee. We recognize that oil companies would likely … pass on some of the cost,” White House economic adviser Jeff Zients told USA Today.
With oil prices tumbling, “some of the cost” means all of the cost.
That means Americans are going to get hit with new trickle down taxes in addition to the 18.4 cent federal gasoline tax they already pay. Many oil analysts say the tax hike on producers will have the equivalent effect of raising the federal gas tax to nearly 50 cents per gallon.
The president’s proposal represents exactly the kind of fuel-hike pain he promised to help Americans avoid while campaigning for reelection in 2011.
“In an economy that relies so heavily on oil, rising prices at the pump affect everybody -– workers, farmers, truck drivers, restaurant owners, students who are lucky enough to have a car,” he said at the time. “Businesses see rising prices at the pump hurt their bottom line. Families feel the pinch when they fill up their tank. And for Americans that are already struggling to get by, a hike in gas prices really makes their lives that much harder. It hurts.”
Today’s Republicans agree with that past assessment form the president, vowing to strike down Obama’s current scheme to hike fuel prices.
“The president should be proposing policies to grow our economy instead of sacrificing it to appease progressive climate activists,” house Speaker Paul Ryan said in a statement. “As this lame-duck president knows, it’s dead on arrival in Congress, because House Republicans are committed to affordable American energy and a strong U.S. economy.”
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