A $10-Per-Barrel Tax on Oil? Obama’s Final Budget Proposal Turns Bold

President Obama Holds Press Conference At White House
“Oil tax” voted “top phrase that keeps GOPers up at night.” Photo: Alex Wong/Getty Images

President Barack Obama has decided that in his final budget proposal he no longer has to bother with politics. In a bout of wishful thinking that evokes candidate-Obama-style idealism, next week’s budget proposal will reportedly ask that $300 billion be dedicated toward the future of transportation. How will he pay for it? By instituting a $10 tax on every barrel of oil. 

Never mind that the plan would be implemented over a full decade: The proposal is already dead in the water. A GOP-controlled Congress is going to see this as the same ballpark as a gasoline or carbon tax and nix it right away. (It does have the potential to be somewhat regressive, because it’ll be passed through to consumers as an increase of perhaps 25 cents a gallon in the retail cost of gasoline.) What Obama is doing with a proposal like this is sending a message to the next administration about what pie-in-the-sky ideas he thinks they should be shooting for.

Transportation accounts for around 30 percent of all U.S. emissions. The Obama plan would boost spending on green transportation by 50 percent, and put $20 billion a year toward “enhanced transportation options,” like light rail, subways, and a bigger version of the high-speed rail initiative he’s already rolled out. It’d also send $10 billion a year plus incentives to local governments to get projects going that would reduce carbon emissions. Obama also wants $2 billion a year for developing entirely futuristic transit ideas: self-driving cars, green airplanes, charging stations for electric cars, rapid bus lines. “We’re still living in a vision that was great for its time, but not for this time,” one senior administration official told Politico. “This is a new vision. We’re realistic about the near-term prospects in Congress, but we think this can change the debate.”

Obama Will Propose a Bold $10-Per-Barrel Oil Tax