Obama floats $10-per-barrel oil tax to prep for clean, self-driving cars
The Obama administration wants to make transportation not only more eco-friendly but also safer. And it wants oil companies to help pay for the transition.
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On Thursday, the president proposed his so-called 21st Century Clean Transportation System plan. The proposal aims to integrate autonomous cars and cut both reliance on fossil fuels and also carbon pollution.
"The investments in vehicle research and deployment would get clean autonomous vehicles on the road more quickly and more safely, while ensuring electric cars and other alternative vehicles have the technology and the charging infrastructure they need," read the plan.
The ambitious plan proposes achieving its goals by imposing a $10 per barrel of oil tax — paid for by oil companies — phased in over the next five years.
Currently, the price of a barrel of oil is around $32 and this proposed tax would represent a 31% tax at that price. Granted, since the tax would be phased in over time, that percentage is bound to fall, as oil prices are expected to rise over the next several years.
Certainly, most of the cost of the tax, if implemented, would be passed onto consumers. However, the proposed tax most likely wouldn't represent a huge jump in fuel prices. After all, gasoline was only $3.65 a gallon when oil was $109 per barrel.
That said, the plan faces extreme pushback from the Republican-led Congress. In fact, House Speaker Paul Ryan called the bill "dead on arrival."
