Obama proposes $10 per barrel oil tax
The White House is proposing a bold $10 per barreltax on oil in a move that immediately sparked abacklash from an energy industry buckling under the pressure of low prices.
The proposal was contained in a budget plan that the Republicanled Congress will ensure isnever enacted, but it is likely to force the Democratic candidates for president to sharpen theirpositions on energy.The oil industry said that the tax would raise the cost of petrol by 25 cents per gallon andundo the shale energy revolution.
The White House said that the tax would encourage a shift away from an oildependenttransportation system and provide revenue that it would use to pay for much-neededinfrastructure investment.
Jeff Zients, director of the White House’s national economic council, told reporters that itwould be paid by oil companies, but not at the wellhead where oil is produced.
To ensure a “level playing field” for American oil producers in the global market, Mr Zientsadded that the tax would not be levied on exported oil products but would apply to imports.
Paul Ryan, Speaker of the House of Representatives,said:"Once again, the president expectshardworking consumers to pay for his out-of touch climate agenda. A $10 tax for every barrelof oil produced would raise energy prices — hurting poor Americans the most.”
Hillary Clinton and Bernie Sanders, who are vying for the Democratic presidential nomination,have sought to outdo each other with their attacks on fossil fuels and calls for action on climatechange.
Mr Zients declined to comment on whether the White House was seeking to influence MrObama’s potential successors, but did say: “No one’s arguing about the challenges facing ourtransportation system, but no one wants to talk about how to pay for it. [What] thepresident’s putting forward here is a smart, strategic approach.”
He added that the White House expected the oil industry to pass on some of the costs toconsumers, a point that the oil lobby implicitly confirmed.
Jack Gerard, chief executive of the American Petroleum Association, which represents theindustry, said: “The White House thinks Americans are not paying enough for gasoline, so theyhave proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harmconsumers that are enjoying low energy prices, destroy American jobs and reverse America’semergence as a global energy leader.”
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