Obama’s proposed crude-oil tax has sucking sounds

It would suffocate the economy, hurt Americans at the pump


In this Wednesday, Nov. 25, 2015, photo, Cornelio Bonilla pumps gas at Best Food Mart gas station in Gainesville Ga. The price of oil continues to fall, extending a slide that has already gone further and lasted longer than most ... more >


By Drew Johnson - - Thursday, February 25, 2016
A lot of Americans are breathing a little easier these days. The low gas prices –gas is less than $2 a gallon most places in the country – mean many folks have a few extra dollars in their pockets.
But if President Obama has his way, low gas prices will be a thing of the past and it will be harder for families to make ends meet.

In his recent budget request to Congress, the president proposed a $10.25-per-barrel fee on crude oil to fund transportation projects. If implemented, this new tax would paralyze the economy, undermine our competitiveness in the global energy market and raise prices at the pump by more than 10 percent.
The timing of the president’s proposal couldn’t be worse. The oil industry, which supports 9.8 million jobs in the United States and accounts for 8 percent of the economy, is suffering its worst financial crisis in 25 years. A 70 percent drop in the price of crude oil over the past year and a half is wreaking havoc on the energy sector.
As a result, oil companies have had no choice but to let people go. Shell has cut its workforce by 10,000 and BP recently announced it will eliminate 3,000 jobs. Halliburton has laid off 22,000 workers since the beginning of 2015.
Some smaller energy companies have found they simply can’t stay afloat in today’s market. For example, Samson Resources of Oklahoma and Texas-based Hercules Offshore and Swift Energy have all filed for bankruptcy.
The ripple effect throughout the economy has been a return to sluggish overall growth: In the last quarter of 2015, the U.S. economy grew at only 0.7 percent, lower still than the already anemic 2 percent the quarter before. Economists are even sounding the alarm about the possibility of another recession.
President Obama’s oil tax would kick the industry while it’s down. Robust economic growth is impossible while the energy sector is sprawled out flat on the canvas.
The president’s proposed oil tax would also snuff out America’s opportunity to become the premier energy superpower worldwide. Before the price of oil dropped, our country was well on the way. Surging domestic production looked to erase decades of dependence on foreign energy sources, especially in the volatile Middle East.
In 2014, our nation passed Russia as the world’s largest producer of natural gas and Saudi Arabia as the leader in oil production. As of last June, the United States produced 9.3 million barrels of crude oil daily – nearly double the figure from just a decade ago.
Congress, to its credit, has attempted to seize the opportunity to parlay America’s growing energy production into a boon for the U.S. economy. Last December, legislators lifted the oil export ban, thereby allowing domestic companies to export crude for the first time in more than 40 years. The move has the potential to lower gas prices by 12 cents per gallon and ensure the United States can play a stronger, more competitive role in international energy markets.
But none of this will materialize if President Obama gets his way and America levies a stifling oil tax. If our country is going to remain on top, our energy sector needs policies that nurture it, not punish it.
While Mr. Obama’s new oil tax proposal appears to be a vindictive jab at big oil companies, it’s everyday Americans who will get stuck with the tab at the pump. Under the tax, drivers can look forward to paying an extra 25 cents or more per gallon. Especially hard hit will be low-income Americans, who spend a greater share of their income on gas than those who are better off.
Unfortunately, instead of trying to help our troubled economy regain its footing, President Obama wants to go the other way to score political points. If his ill-conceived tax is implemented, that’ll mean big harm to the economy, and a big bite out of Americans’ wallets.

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