Even as signs of an economic recovery may still be out of reach for the average American, at least low prices at the gas pump have been a welcome reprieve for tight wallets.
Now the Obama administration is looking to take advantage of those low oil prices by proposing a $10.25 tax on each barrel of crude oil produced in the United States. As reported by the Washington Examiner, this would be one of the biggest tax increases on gasoline in history, something that will surely hit hard for many still struggling American consumers.
Although the Obama administration has claimed this tax would be be levied solely on oil companies, economists say the notion that this tax would not simply be passed on to consumers is dubious, to say the least.
In fact, a Congressional Research Service report estimates the tax could add between 20-25 cents to the cost per gallon, making it the largest increase in the gas tax since it was passed in 1932.
As the Washington Examiner reports:
[Alaska Republican Sen. Lisa] Murkowski pointed out that the increase from Obama’s proposed oil tax would be bigger than the current federal gas tax.
“The administration’s proposal is internally inconsistent and ambiguous, but if it was translated into an excise tax, it would be the largest increase in history,” she said.
The service reported transportation and home heating costs would increase if the oil tax became law. Oil companies would be less likely to hire new workers and explore for new oil sources as well.
This Friday, the House will vote on a resolution expressing disapproval of Obama’s proposed tax, indicating a possible battle on the House floor on the coming weeks. With jobs on the line, and millions of Americans still not feeling the effects of the economic recovery, GOP lawmakers claim that such an oil tax would slow economic growth by an estimated $320 billion over the next ten years.
Head over to the Washington Examiner for the full story.