White House Proposal To Tax Oil Would Result In Fewer Jobs And Less Investment And Would Raise Energy Prices
The White House announced last week that President Barack Obama’s fiscal year 2017 budget, which will be released this week, will include a proposal to raise taxes on oil by $10 a barrel. The president would use the revenues from the tax increase – approximately $300 billion over 10 years – to fund investments in “mass transit, high-speed rail, self-driving cars, and other transportation approaches designed to reduce carbon emissions and congestion.”
While MSCI supports responsible efforts to reduce greenhouse gas emissions, this tax will be passed on to American consumers and businesses in the form of higher gasoline prices, costlier air tickets and price increases across the board on consumer products delivered by truck, air and rail. It will also likely destroy hundreds of thousands of jobs throughout the economy in traditional industries that rely on affordable energy, and those that employ workers to provide the products and services supporting the energy-producing sector. As such, as part of the Energy Equipment and Infrastructure Alliance, MSCI will work to oppose the new tax and to urge Congress to reject it.
Last week EEIA President Toby Mack argued the tax would put American oil and refined products at a steep competitive disadvantage versus foreign producers like Saudi Arabia, Russia and Iran. Mack said, “Our producers and the suppliers that support them are already struggling for global market share against countries trying to put U.S. production out of business. This tax would not only be costly to American consumers, but would send countless American jobs to other not-so-friendly countries.”
He added that at today's prices, it would amount to a 30 percent hike in the cost of domestic oil, and would likely cause some American refiners to buy foreign crude oil instead of our own to make products like gasoline and diesel fuel.