Oil Tax Hike is About Raising Revenue, Not Clean Up
Nicolas Loris /
Instead of concentrating on the cause of the oil spill, lawmakers on Capitol Hill appear to be focused on liability limits and oil tax increases. The White House and some Members of Congress are pushing for a one-cent increase per-barrel of oil produced – from eight cents to nine. In reality, this is an indirect gas tax that will be passed onto the consumer. Currently the direct federal gas tax is 18.4 cents per gallon with the mean state tax being 27.2 cents per gallon. The purpose of the newly proposed tax hike is to increase the amount of funds available in the Oil Spill Liability Trust Fund and ostensibly collect more money for the clean up. But the real purpose is to make political ends meet.
Although it doesn’t sound like much, the Wall Street Journal reports that “The one-cent increase would raise about $5 billion over 10 years to help offset the cost of the tax package, which is nearing $200 billion. The tax could go to 10 cents a barrel in 2017.”
Wait. What tax package? Politico says, “The added revenue is coveted by tax writers, still struggling to find close to $50 billion in offsets needed to pay for an election-year package of infrastructure investments and popular tax break extensions.” This makes one wonder: is this about cleaning up the Gulf or making ends meet for other political agendas? (more…)