Do we need to talk about Obama’s $10-per-barrel oil tax proposal?
posted at 10:01 pm on February 4, 2016 by Allahpundit
It’s not going to happen and I don’t get paid by the word. Can “whatever” suffice as a reaction to this?
Okay, here’s a thought. The odds of a tax hike passing a Republican Congress in an election year are about the same, I’d guess, as the odds of Trump skipping another debate.
Obama aides told POLITICO that when he releases his final budget request next week, the president will propose more than $300 billion worth of investments over the next decade in mass transit, high-speed rail, self-driving cars, and other transportation approaches designed to reduce carbon emissions and congestion. To pay for it all, Obama will call for a $10 “fee” on every barrel of oil, a surcharge that would be paid by oil companies but would presumably be passed along to consumers.
There is no real chance that the Republican-controlled Congress will embrace Obama’s grand vision of climate-friendly mobility in an election year—especially after passing a long-stalled bipartisan highway bill just last year—and his aides acknowledge it’s mostly an effort to jump-start a conversation about the future of transportation. But by raising the specter of new taxes on fossil fuels, it could create a political quandary for Democrats. The fee could add as much as 25 cents a gallon to the cost of gasoline, and even with petroleum prices at historic lows, the proposal could be particularly awkward for Hillary Clinton, who has embraced most of Obama’s policies but has also vowed to oppose any tax hikes on families earning less than $250,000 a year.
A 10-buck-a-barrel tax comes out to 22 cents on the gallon, notes economist Donald Marron, which would more than double the current federal gas tax of 18.4 cents for regular gasoline. Did I dream it or haven’t we spent the past eight months watching Trump and Bernie Sanders vault into contention for their parties’ nominations by arguing (in very different ways) that America’s political class has abandoned its working class? Trump targets immigration while Sanders targets redistribution, but they’re both protectionists and economic populists who promise blue-collar voters more money in their pockets after they’re elected. Every analysis of Trumpmania or Berniemania includes a requisite passage describing wage stagnation among the middle class over many years and the inevitable backlash that’s now provoked on the left and right. Finally, the middle class catches a tiny break economically with plummeting gas prices … and here comes Obama to propose screwing them on that too with one of the most regressive taxes he could realistically propose. Am I taking crazy pills? Americans can’t possibly be so stupid as to think this tax would be absorbed by oil companies and not passed on to consumers at the pump, can they?
What’s Obama’s game here? Is it just a pander demagoging “Big Oil” that assumes voters don’t understand how taxes work? Is he laying down a “legacy” marker so that historians can say he gave it the ol’ college try on raising revenue for infrastructure spending and clean energy? Is he just pranking Sanders and Clinton by forcing them to explain to voters why recapturing the average joe’s small savings on gas for the federal leviathan is worth doing? It’s one thing to take a political risk when the policy is worthwhile and has a chance of passing. Why do it when it doesn’t?