Gas Taxes

Obama's New Oil Tax Would Drive Up Gas Prices

The president is virtue-signalling during his final year in office.

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Gas

If you have ever found yourself at the gas pump thinking, "I really wish it cost more to fill up," then President Obama has just the idea for you. In his final budget request, he will include a call for an additional $10 in taxes per barrel of oil. This terrible idea would roll back the tremendous energy gains made in recent years and harm the economy.

The biggest and most obvious impact of the Obama gas tax would be its impact on the pocketbooks of American drivers. That's right: one of the most underrated findings in economics is the fact that the person cutting the tax check isn't always the one shouldering its burden. In this case, you can tax "oil companies" as much as you want, but the burden will be passed on to consumers. And indeed, estimates show the $10 per barrel fee could translate to roughly 22 cents per gallon of gasoline. That would more than double the current federal gasoline tax of 18.4 cents per gallon. The president, in other words, wants Uncle Sam to collect $5 or more every time you fill up.

The president's plan for this new windfall is to fund a "21st century clean transportation system." Central planners love to dream up such massive projects, but they lack the discipline and necessary market incentives to determine if they're actually feasible, much less to implement them successfully. California's multibillion-dollar high-speed rail boondoggle is just one of many examples proving the point.

The White House is spinning that the added costs imposed by the new crude oil fee will be borne primarily by producers, but that belief defies economic reality. It will be passed on to consumers and felt not only at the pump, but also in their homes and through higher costs for any other good or service that requires significant energy use.

It wasn't so long ago that the president at least rhetorically acknowledged the negative impact of higher energy costs, particularly on the poor—for whom transportation and residential energy costs account for a larger share of their household budget. During a speech in 2011 on energy security, he said of rising oil prices: "If you're somebody who works in a relatively low-wage job and you've got to commute to work, it takes up a big chunk of your income. You may not be able to buy as many groceries. You may have to cut back on medicines in order to fill up the gas tank. So this is something that everybody is affected by."

Then, as energy specialist at the Heritage Foundation Nick Loris reminded me, "In his last State of the Union not too long ago, Obama said that gas prices under two dollars a gallon 'ain't bad.'" As Loris noted, "He was right. It may be bad for his goals to fuel cars on algae or push millions of subsidized electric vehicles to the market. But it's putting money back into the wallets of American households."

I assume the president understands the consequences of what he is proposing, so apparently he now thinks that more money in consumers' pockets is a bad thing. Or maybe it's because he can't claim credit for it. Indeed, the price of oil has dropped considerably, thanks to an energy revolution that he opposed every step of the way, even though it has significantly benefited the economy. Unable to prevent positive developments like fracking despite the determined effort of his regulators, the president instead is now seeking to offset the benefits of greater energy production by attaching to it the ideological baggage of austerity environmentalism.

Presidents at the end of their tenure in office are generally prone to legacy building. President Obama has taken that impulse one step further and wandered into the realm of virtue signaling. He must surely know that Congress is not going to impose such a massive new tax on Americans—especially in an election year—yet he's seemingly satisfied by simply broaching the topic in hopes that it becomes more politically palatable in the future.

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  1. “Obama’s New Oil Tax Would Drive Up Gas Prices”

    Uh…no shit?

  2. How about we tax manbuns instead?

    1. Can the price be a mandatory vasectomy?

      1. It would be a pointless gesture, but sure.

  3. ALL business taxes are passed on to consumers; hell, ALL taxes are paid by people. The myth that companies pay taxes and we can soak companies for all the money for the things that collectivists want is some of the most illogical tripe ever masqueraded as common sense.

    1. the myth is that companies are not people. it’s true in the same way a “crowd” is not a “person” i guess

  4. He is just mad that the artificially high oil prices have gone away (for a bit) and it is hurting his precious “clean” alternatives. So he has to come up with some way of making the price go back up.

    1. 100% this.

    2. “Under my plan, energy prices will necessarily skyrocket.” It’s not like he didn’t warn us.

    3. Or just as likely, Pres. Obama sees a golden opportunity to add a big chunk of cash to the federal treasury without it seeming especially painful to us little people, since gas prices are so low.

  5. I assume the endgame is to repeat how bad oil is until the Republican public forgets their dislike of tax hikes and agrees that gasoline deserves a “sin tax”. Worked with cigarettes but the two are hardly comparable in terms of the ill effect government is trying to save us from.

  6. He just can’t help himself.

  7. Of course it’ll raise prices.But ,the big lie is it will go to,such and such.All taxes and fees go to the Treasury in one big pot and congress spends it where the may.Here in Ohio the total tax is 46 cents I checked .Where has that money been going? They can’t tell you.Then again,if all gas taxes and fees really went to JUST roads and bridges there may be plenty to do what need to be done.

    1. Not according to Reason. Poole’s mileage tolls would amount to .75+ per gallon.

    2. Not exactly, the gas tax is collected locally, then sent off to the Feds, where they portion it back to the states using a formula that includes a base for every state, with extra dollars allotted to high population states. Nearly all the funds are deposited to the Highway Trust fund; approximately 84% is earmarked for highway projects, 16% for mass transit. Apparently, only the Feds are capable of determining how the money should be spent.

  8. But this will just be a temporary tax that will be removed when oil prices increase.

    Why are all of you laughing?

    1. That’s not laughing, that’s the sound of shotgun shells being chambered

  9. I propose that any elected official who proposes a tax increase must commit seppuku, or cannot be voted upon.

  10. Ironically, it seems that oil tax revenues would actually have increased because of the tendency for low prices to encourage more consumption. They would not be up as high as what a $0.22 increase would bring, but still up. If he increases the tax load too much too soon, then people might drive less and bring the revenues back down to what they had been before.

    This president is not that smart. Neither are his advisors.

    1. The president “Knows” he is right in all things, and thus cannot be in the company of those people who claim he is wrong. So he has surrounded himself with people who recognize his ‘intellect’.

    2. He only has one advisor: TOTUS

    3. He may actually have been told this, he just might not care.

      Remember during the 2008 campaign, he had promoted an increase in capital gains tax rates. A reporter reminded him that reputable studies showed that raising those taxes would actually lower revenue (the Laffer Curve at work). Senator Obama had basically said ‘I realize this, but I want to raise the tax rates anyway because of fairness.’

  11. It wasn’t so long ago that the president at least rhetorically acknowledged the negative impact of higher energy costs, particularly on the poor?for whom transportation and residential energy costs account for a larger share of their household budget.

    That teleprompter has since been fired.

    1. Next the teleprompter responsible for sacking the teleprompter will be sacked…

  12. News Flash: Stupid asshole who doesn’t pay for his own gas or drive his own car proposes a plan to make it more difficult to do BOTH. For your own good. Story at 11.

  13. Green Energy!
    Tasty, tasty Green Energy!

    1. Tastes like NyQuil.

    2. Is that when you make everyone eat 3 pounds of brussels sprouts, collect the resultant exhaust and use that to run your cars?

  14. The economic math of this proposal makes no sense. But, the political math is solid. Mr. Obama wants to raise taxes. He needs to in order to be able to give money to cronies. But tax increases hurt people and they hurt the economy. That isn’t good politics. But, if you raise taxes so that someone else is doing the collecting for you, that’s a lot better. And oil companies tend to be Republican, at least in the public’s mind. And the public will quickly enough forget, or never figure out, that the higher prices charged by the oil companies are due to the tax increase. So, he can blame them when the public feels the pinch.

    1. the public will quickly enough forget, or never figure out, that the higher prices charged by the oil companies are due to the tax increase. So, he can blame them when the public feels the pinch.

      Unfortunately people really are that stupid. “Damn OIL KKKOCHPORASHUNZ!11!111!!!!!”

    2. If the CEOs would just limit paying themselves a living wage, which is all anyone really needs, the taxes could be paid with their salaries, and the price of gas wouldn’t have to go up. I mean, the CEOs just spend all day swimming in their vault of gold coins. They don’t actually do any work.

      1. “CEOs just spend all day swimming in their vault of gold coins. They don’t actually do any work.”

        This is what many “progressives” actually believe. I always laugh when I hear people say that. Sure, I bet there are a few CEOs out there who don’t do much of anything, but on average, a CEO has an incredibly stressful job, especially the ones who built the company from the ground up. When people whine that CEOs get millions of dollars for “doing nothing”, I have to wonder if they have ever held a job where they supervise employees.

        Yet, these same people probably think that government bureaucrats are the hardest working people in the country. The ones who ACTUALLY DO sit around collecting a large paycheck for doing jack shit. I work in a state prison, so I’ve seen this first hand. And while there are some hard-working people there, there are also a lot of lazy people who contribute nothing whatsoever.

  15. Obama has opposed the energy revolution? He has?

    Why, because he refused to give a boost to Canadian oil production (the key word is Canadian)? Oh that’s right, he has just allowed oil production in the Atlantic. Fracking? He stopped it? Gee, seems like it’s rolling on in any place that wants it.

    Here is the sad fact for you… Domestic oil production has increased over 70% since he took office. I know anything bad that occurs in the last 7 years is his fault, and anything good occurred in spite of him.

    I will let Tom Kloza of Oil Price Info Service explain this to you:

    “You can’t credit or blame the president [for the oil boom], It’s been the twin pillars of price and technology. It’s capitalism at work.”

    Yeah that right, the President letting a market move. And here I thought that’s what a libertarian would want.

    1. By the way, part of that energy revolution is investment in renewables, and the strong drop in price of those renewables. And adding to that concurrent drop in price of oil was fuel economy standards introduced by the President. Yeah, he did his best to get on the way of that energy revolution. Right.

      1. So your argument is that fuel economy standards lowered the price of oil?

        You really are super smart. We all agree with you now.

    2. By the way, Veronique, you need to get over that the President believes, as neat everyone else does other than most libertarians, that climate change is a real and present danger.

      Is a tax passed on? Yes. But that didn’t stop respected libertarian Jerry Taylor from proposing a carbon tax to fight climate change.

      “Republicans should put forward a carbon tax and conservatives should throw themselves into getting it passed. Better to let market actors decide (in response to price signals) where, when, and how greenhouse gas emissions are controlled than have government bureaucrats do the same via regulation.”

      You would do well to listen to him.

      1. That was very good. We all agree with you now.

        1. It’s working! Changing hearts and minds one commenter at a time!

          1. Not enough hearts and minds, Comrade. You are fully aware that your quota is two new Party members per week.

            Fail us again and you will experience the full wrath of the glorious Revolution.

      2. everyone else does other than most libertarians, that climate change is a real and present danger

        Go to WND.com and tell them that. They’ll laugh in your face.

        1. Right. AND wnd.

    3. We are very glad that Dear Leader allowed the market to move before taxing it. He truly is the LightBringer!

    4. Obama has opposed the energy revolution? He has?

      Yes, you dissembling scumbag, he has.

      http://www.blm.gov/pgdata/etc/…..ummary.pdf

      Since he became President the number of leased acres each year has declined by a third.

  16. Obama’s New Oil Tax Would Drive Up Gas Prices

    That’s the whole point. There’s nothing progressive enviro-nuts hate more than cheap gas.

    In addition to the legacy building and virtue signaling, I think he may also be sending a message to the progtard base. “If you want more of this shit, then make sure you vote for whoever the Dem nominee is, whether it’s the lying corrupt bitch or the commie.”

    1. “There’s nothing progressive enviro-nuts hate more than cheap gas.”

      You may be right, but most “progressives” I know are making the best of it by using cheap gas as an excuse for why Venezuela is not a paradise on Earth. “If only oil prices hadn’t dropped, Venezuela would be leading the world in prosperity!!”

  17. Up to I looked at the draft which was of $7319 , I be certain …that…my neighbour was like they say realie receiving money part time at there labtop. . there moms best frend started doing this less than and just paid the mortgage on their apartment and bought a gorgeous Lexus LS400 . site here……..

    Click This Link inYour Browser….

    ???? ? ? ? http://www.Wage90.com

    1. Jackhand, I liked your comments above better.

  18. while i am no fan of taxes, a gas tax is one i think is more in line with reasonable compromise. yes, obviously part of their motivation is to drive people to greener solutions. but the gas tax is a usage based tax. those who drive more, pay more. those who chose to drive a personal vehicle that gets 13 mpg will pay more than those who chose to drive something that gets 28mpg (more that reasonable, even for a cheap used car). i would much rather pay more at the pump… where i have options to reduce how much i spend… than more of the forced theft that happens to my paycheck every week.

    and, for better or worse, it is a tax already built into the economy. 22 cents is definitely too big a change at once, but the current rate has not changed for over 20 years. they could bump it a little, to account for inflation, and the world would not end. the economy has absorbed several years of high gas prices. a few cents a gallon would not break us, now that gas is below $2, and looks to stay there for awhile. i think 22 cents is excessive, but even that would likely have minimal impact on the economy, after years where gas was $1 or more higher. it might lessen some of the benefit of lower gas prices, but it won’t cause any new problems, because the economy has already shifted to accept higher prices.

    1. Absolutely agree. Though the problem is the congress critters seem to use it on other things it isn’t really for and then hoot and holler about crumbling infrastructure. We need moar!

      1. there is that

    2. Or the .gov could stop wasting so much of the tax money they already collect and then they would have more than enough money for RHODZ!

    3. …gas tax is a usage based tax

      Oh really? So I’m using the roads more harder with my 20 year old 20mpg Pasat than the smug bastard in the next lane driving his Obama-bestickered, NPR-playing, coal-fired Pious? (Sorry, that’s Prius. Natural mistake.)

      I don’t accept your premises.

      1. it is usage tax for gas, not the road. you can disagree with the incentive it provides for higher fuel efficiency, but it is a usage tax.

        1. Do you really believe that if everyone switched to hybrid vehicles tomorrow that the government wouldn’t raise taxes so that the average driver was still paying $30 to fill up?

          1. i am not advocating for the reasons they want to raise the taxes, not saying i agree with them. i am only saying that all the doom talk is completely out of touch with reality. i, personally, go through a decent amount of gas, and 22 cents would make me pay about $30 more per month….. after falling gas prices are saving me $100 (or more) a month from where they were…

    4. You do realize that its a $10 in taxes per barrel of oil right? Oil is used in more than just driving.

      22 cents is minimal? For you maybe and the average driver, but what about the truckers, transporters or anything else that uses the product.

      Also, where does this road tax money go? Not toward roads does it? Wait so I drive less, which is what they want, but I have to pay more because I’m driving less?

      1. 22 cents is minimal, when compared to where gas prices have been for the previous 6-7 years. the market has already adjusted itself for much higher gas prices. i explicitly said i thought 22 cents was more than i would see as wise, but i still maintain it’s relatively small compared to the natural change in gas prices we have seen.

        i also agree that the government habitually misspends whatever funds it acquires. just saying that this is not that bad, as far as taxes go. i in no way say we need this tax, or advocate for whatever they are claiming it is going to pay for. just saying it’s not that terrible. it won’t create economic collapse, won’t surprise the public with a big new burden… it will make gas prices go up by an amount that is small compared to what we have seen in the past.

        1. If 22 cents per gallon is minimal how about supporting a federal gas tax reduction for that amount.

          1. sure, why not. my point is that it won’t make a huge difference. though you will have to fix the spending side of the problem first.

  19. My roomate’s sister makes $86 an hour on the internet . She has been without work for 5 months but last month her pay was $17168 just working on the internet for a few hours. linked here…..
    Clik this link in Your Browser……..

    ??????????? http://www.Wage90.com

  20. My roomate’s sister makes $86 an hour on the internet . She has been without work for 5 months but last month her pay was $17168 just working on the internet for a few hours. linked here…..
    Clik this link in Your Browser……..

    ??????????? http://www.Wage90.com

  21. before I looked at the receipt of $thirty thosand , I have faith …that…my cousin woz like they say realy receiving money in there spare time at their computer. . there dads buddy haz done this for only about 14 months and just repaid the mortgage on their place and got themselves a Honda . try this …………..

    ——- A?l?p?h?a-C?a?r?e?e?r?s.c?o?m

  22. Up to I looked at the draft which was of $7319 , I be certain …that…my neighbour was like they say realie receiving money part time at there labtop. . there moms best frend started doing this less than and just paid the mortgage on their apartment and bought a gorgeous Lexus LS400 . site here……..

    Click This Link inYour Browser….

    ???? ? ? ? http://www.Wage90.com

  23. If only people gave Dear Leader’s ideas a chance they’d see what great ideas they are.

  24. So much for a revenue neutral carbon tax. Once the government has the revenue it will spend it. Indeed, the government will spend it even before it has the increased revenue.

  25. Well – at least the EPA is going to ban people from converting street cars into race cars to stop climate change.

  26. my favorite online activity lately is to watch people, some of whom are my family, argue that if you raise the minimum wage, it will have no impact on prices or anything else. all that will happen is the economy will take off like a rocket because the lower and middle class will go on a buying spree with their new found cash.

    they always seem to add how ignorant anyone is who says otherwise. when faced with someone (who ironically thinks sanders is nearly perfect, but raising the minimum wage is his one flaw) who pointed out that when it was raised last time, prices went, one of those relatives promised to get the math that says they weren’t connected in any way.

    i keep thinking they don’t really believe in “free”, it’s just they’re convinced they’ll never have to pay for it. i’m becoming more convinced that it’s all the same thing inside their head after all.

  27. just before I looked at the bank draft 4 $4970 , I accept …that…my father in law was like they say actualie making money in there spare time from their laptop. . there great aunt had bean doing this for less than thirteen months and at present paid the mortgage on there condo and purchased a brand new Volkswagen Golf GTI . check out here….

    Clik this link in Your Browser
    ????? http://www.Wage90.com

  28. Making gasoline (and oil in general) more expensive is the way to get the market to reduce consumption. You do want to avoid global heating disaster, don’t you? Why shouldn’t oil users pay for the damage they do?

  29. Richard fuckin’ Stallman, at Reason? A banner day, I say!

    Thank you for GNU and the Free Software Foundation. I loathe your politics but I will defend to my dying breath your right to be an asshole.

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    All we need is a mobile or PC with a very good internet connection. There are many applications by which we can enjoy videos, our missed programs, live streaming etc.

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