Obama Proposes $10/Barrell Oil Tax To Fund Government Transportation Spending

Tyler Durden's picture

"It's a supply issue", "No, it's a demand issue" - when it comes to the cause for plunging oil prices, the two camps will surely never agree on just what is causing it.

Luckily, Obama may provide just the tiebreaker.

Moments ago, Politico reported that in his final budget, Obama is set to unveil an ambitious plan for a “21st century clean transportation system.” which will be funded by a $10/barrel tax on oil.

Punishment for evil oil companies, you say? Not so fast: any government tax would be immediately passed on to those US consumers who recently had to take out a second-lien subprime loan to finish funding the purchase of that brand new Ford F-150 truck.

From Politico:

Obama aides told POLITICO that when he releases his final budget request next week, the president will propose more than $300 billion worth of investments over the next decade in mass transit, high-speed rail, self-driving cars, and other transportation approaches designed to reduce carbon emissions and congestion. To pay for it all, Obama will call for a $10 “fee” on every barrel of oil, a surcharge that would be paid by oil companies but would presumably be passed along to consumers.

In other words, while there may be excess supply of about 3 million barrels daily according to Saudi Arabia, suddenly demand is about to fall off a cliff as the price of oil surges thanks to Obama's latest brilliant intervention in the "free market", one which would result in a roughly 30% tax to E&P companies and a 25 cent jump in the price of a gallon of gas.

The good news: it won't pass...

There is no real chance that the Republican-controlled Congress will embrace Obama’s grand vision of climate-friendly mobility in an election year—especially after passing a long-stalled bipartisan highway bill just last year—and his aides acknowledge it’s mostly an effort to jump-start a conversation about the future of transportation

... at least not in the current Congress. But what about next time?

By raising the specter of new taxes on fossil fuels, it could create a political quandary for Democrats. The fee could add as much as 25 cents a gallon to the cost of gasoline, and even with petroleum prices at historic lows, the proposal could be particularly awkward for Hillary Clinton, who has embraced most of Obama’s policies but has also vowed to oppose any tax hikes on families earning less than $250,000 a year.

And there you have it: what so many had expected for so long, was just proposed by the president who hopes to fill the price gap resulting from Saudi efforts to crush US shale producers, by yet another government surcharge, one which will lead to a dramatic drop in demand, and unless something drastically changes on the supply side, lead to an even greater glut in what is already record oil inventory.

But the biggest irony, of course, is that while there clearly is oversupply, what the Fed and other central banks are doing is now enabling their governments to capture every last possible "externality" and collect even more revenue on the back of disastrous monetary policy, policy which created bubbles and provided generous funding to create massive excess capacity and production of record amounts of commodities, such as in this case, oil.

So if by some miracle this tax does pass, and the price of a gallon suddenly spikes by 25 cents even as the world is literally drowning in oil, it's not just Obama's fault: thank Bernanke, and of course Janet, and all their peers who share dinner once every two months at the BIS tower in Basel,

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surf0766's picture

Typical Marxist bullshit

Deathrips's picture

As competently as they have displayed they are incompetent in managing anything...one must think its really the agenda to fleece the people. Why do we hire people to shear us?

The tax will subsidies the losses they are intentionally taking and then when prices come back up (years from now) they keep it....social security plundering anyone?

Fuck em fire em all.



Soul Glow's picture

Next ban cash, then go NIRP, then raise everyones chocolate rations from 2 ounces to 1 ounce.

Deathrips's picture

*** I dont consent to be sheared. Mob rule sucks!



NoDebt's picture

$10/bbl would almost pay for the cost of federal Corn Ethanol subsidies.  Brilliant.

undertow1141's picture

I'm cheering now! Push this bus over the cliff! Nothing kick starts an economy that is flailing like a 33% tax on an essestial commodity.

Karlus's picture

LOL, why stop at $10? Seems to me people are used to paying much much more.



0b1knob's picture

$10 tax on IMPORTED oil would actually be a good idea.   Promote US production and jobs.

Burn the OPEC countries down and then piss in their ashes.   

jcaz's picture

This is why we keep him on the golf course-  otherwise, he starts thinking........

pods's picture

"Cheaper to have him golf all day than to be at work."


Boris Alatovkrap's picture

ZHer, play very close attention to slight of hand pick pocket technique of soclalist statist.

When price of barrel is low, tax is impose by fix dollar tax of $10 barrel. This is not surcharge base on any true metric, is calculate as highest possible surcharge that market is tolerate at current barrel price.

Fasting forward, when oil is $100 barrel, 10% is not sufficient for USSA theft of citizenry by Central Bank, so THEN, will raise tax to $33 per barrel, or same as current percentage. Then, forward to lower gas price, do not expect decrease in tax.

This is "ratchet racket", type of action that is make old people lose hope, dead people rotate in cemetary (only because young person cannot remember price before tax or is quick forget with iDistraction™.)

In other news, government is increase chocolate ration 5g per day to 20g per week.

Countrybunkererd's picture

Beautifully stated... Disqusting methodology.  +1.9232K.  Think Affordable Care Act if you are a leftist fool.  THANKS!

jerry_theking_lawler's picture

Economy is on the rails due to the ACA and millions of other policies, rules, regulations and taxes imposed on the citizens by government. What is 1 more? Hopefully, we hurriedly get the straw to break this camels back so we can go back to a free country and dig ourselves out of this mess.

t0mmyBerg's picture

All I can say is...what a great fucking comment

MalteseFalcon's picture

The political class cannot stand that the average joe is catching a break.

"Those savings belong to us" they wail. 

"Where is OUR cut?" 

"These savings should be whacked up to US."


GoldSilverBitcoinBug's picture

Then you don't mind that other countries tax the hell out of American imported product ?

Or you will send freedom bombs, regime change or isolate any countries that do so ?

PAPA ROACH's picture

I propose a $10/per breath of air tax on anybody who voted for this idiot, retroactive to Nov 2008.

still kicking's picture

I prefer to price in ounces, 1 oz ag per breath.

Countrybunkererd's picture

I prefer rationing their breath itself...with an upper limit that absolutely keeps EVERY ONE of them from voting EVER AGAIN.

lincolnsteffens's picture

What do you mean "Push this bus over the cliff."? It went over years ago and has been in slo-mo free fall. Gov. must have filled it with helium but it is starting to leak badly now. Get out of the way!!

Great idea to put a $10 a barrel tax when people are out of work or getting minimum wage. This should make patriots buy more gasoline. Wait till the final collapse because they will need a $1,000,000 a barrel tax in order to pay to keep the lights on the highways at night.

I wonder what the hell the Pres. is thinking when he steps up to the mic and says shit like this. I really would like to know what he is thinking. ( "Why do those assholes tell me to say stupid shit like this. Oh well, the four suitcases full of  cash helps alleviate my foolishness. Good thing I left my pride in Chicago before I came to town.")


American Psycho's picture

B/c the government can do it better.  (clearly sarc.)  I think my blood pressure goes up after a ZH visit. 

yellensNIRPles's picture

"...then raise everyone's chocolate rations from 2 ounces to 1 ounce."

Now that my friend, is government accounting if I've ever seen it.

Central Bankster's picture

Can we just get fucking on with it already?  Why must they slow creep to full blown state control of all resources and production?

Vashta Nerada's picture

The best method known to decrease demand, just when we don't need it.

curbyourrisk's picture

Don't forget our Victory Gin as well!

peddling-fiction's picture

Thank you Supreme Leader for being so generous and thoughtful. /lol

pods's picture

Now all you non-smoking cocksuckers can finally take one in the poopchute for "the children."


SethDealer's picture

It sux that president coon has never had a job

Jethro's picture

Sucking cock for cocaine doesn't count? Because, I'm pretty sure he's tenured at that.

Government needs you to pay taxes's picture

Suck cocaine off cock, WINNING!

JRobby's picture

Barrel Taxin' Barry!!!!

God forbid any $$$$ gets diverted from the "BLOWING THE SHIT OUT OF OUR NUMEROUS ENEMIES" budget line item over to "transportation infrastructure funding".

Victory_Garden's picture

"Typical Marxist bullshit"

Hmmmm...yeah...Carbon Taxes...whoda thunk?



Distraction # 456.890.6.=


BullyBearish's picture

SWINGERS...a new definition is soon to come

doctor10's picture

Some Ivy League idjit in the Obama White House got his "gold star" -and probably some frickin' federal bonus for this piece of communist brilliance

zzz111's picture

Tey will start dumping the worthless oil in the oceans to get rid of it. Price discovery should allow people to buy more of it when it's cheap, but slapping fixed taxes (not %) will make oil worthless.

NoDebt's picture

See?  Exactly like I said the other day.  I could fix the problem of oil costs being too low by having the government tax it higher.  I believe I said $30/bbl tax rate in my post but, hey, they're just getting warmed up.  Give 'em time.

Soul Glow's picture

As if shipping didn't have enough problems.  Now they should pay a 40% tax on the oil they already can't move.  That'll do wonders for business cost structure.

Bryan's picture

I think that's the point.  "Tax the rich (oil companies are rich, right?)" and "renewable resources" and "carbon tax" and all that progressive stuff that doesn't work in the way they intend.

undertow1141's picture

There was a saying about good intentions and a road going someplace, but I can't remember it.

HopefulCynical's picture

Bryan, it works EXACTLY the way they intend. They claim to have a different intended outcome. But they don't.

boattrash's picture

I proposed Obama hang himself, but that didn't happen either.

replaceme's picture

I want to see his transcripts - no one is this dumb.

surf0766's picture

The question is not dumb or not. He is a marxist and believes he knows what is best for you

skeelos's picture

Wrong.  He's a Marxist and knows he knows what is best for the world.  And to a homosexual Muslim Kenyan, what is best for the world is the destruction of the US.

replaceme's picture

I agree, but I have this image of someone trying to fix a horribly complicated machine by jabbing at it with a spud bar. Here, HERE - that'll fix it real good.

SilverDOG's picture

Can you not hear the US debt crumbling with said tax. s.

Ausonius's picture

"It isn't about revenue: it's about fairness."


- BIG BRObama to Joe the Plumber, in Toledo Ohio 2008

kenny500c's picture

There is already a record amount of taxes collected by the Federal government, unfortunately for Democrats it is never enough.

That is a regressive tax, btw, becuase the poor pay a higher portion of their income for energy.