Consumers enjoy the benefits of lower oil prices but President Obama wants to take that joy away.
In a dead-on-arrival lame duck proposal, Obama Proposes $10 per Barrel Oil Tax.
The White House is proposing a bold $10 per barrel tax on oil in a move that immediately sparked a backlash from an energy industry buckling under the pressure of low prices.
The White House said that the tax would encourage a shift away from an oil-dependent transportation system and provide revenue that it would use to pay for much-needed infrastructure investment.
But the Obama administration was vague about how it would be levied. Jeff Zients, director of the White House’s national economic council, told reporters that it would be paid by oil companies, but not at the wellhead where oil is produced.
Hillary Clinton and Bernie Sanders, who are vying for the Democratic presidential nomination, have sought to outdo each other with their attacks on fossil fuels and calls for action on climate change.
Jack Gerard, chief executive of the American Petroleum Association, which represents the industry, said: “The White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America’s emergence as a global energy leader.”
Obama’s trial balloon is not only lacking air, its full of holes. Details? There aren’t any. Supposedly it will be “paid by oil companies but not where it’s produced“.
I am trying to get a handle on that, but the best translation I can come up with is “consumers will pay for it one way or another“.
Don’t worry, the tax will only be on imports, not exports.
Hmmm. Is this allowed under the Trans-Pacific Partnership (TPP) agreement?
Well, who knows? It’s probably in the fine print somewhere in terms only the lawyers understand.
The TPP is another one of those things you have to pass to find out exactly what’s in it for everyone!
But here’s one thing you can count on: Whatever is in the agreement won’t be any good for consumers, at least compared to a true free trade agreement.
Toilet Paper Proposal
Contrary to popular myth, the Trans-Pacific Partnership is not about free trade. And certainly taxing oil imports but not exports isn’t either. Let’s recap TPP.
- April 07, 2015: Obama’s Trans-Pacific Partnership Fiasco vs. Mish’s Proposed Free Trade Alternative; How Will TPP Function in Practice?
- April 11, 2015: Legacy Skills and Capital; Sugar and Steel; Turning TPP to TP
- October 11, 2015: TPP and Free Trade Canadian Style
- October 12, 2015: Hillary Clinton, Dead Rats, Toilet Paper Politics
Hillary Clinton, who as Secretary of State in 2012 said the Trans-Pacific Partnership “sets the gold standard in trade agreements to open free, transparent, fair trade, the kind of environment that has the rule of law and a level playing field,” has… come out against TPP.
“I’m continuing to learn about the details of the new Trans-Pacific Partnership, including looking hard at what’s in there to crack down on currency manipulation, which kills American jobs, and to make sure we’re not putting the interests of drug companies ahead of patients and consumers. But based on what I know so far, I can’t support this agreement,” said Clinton.
How is it that it’s more important for a private citizen to be more concerned about and more aware of details in a trade bill than the Secretary of State?
How is it that president Obama is clueless on his own energy proposal?
Mish’s Proposed Free Trade Agreement
To call TPP a “free trade” agreement is ridiculous. Import taxes and tariffs are equally ridiculous.
I am in favor of free trade. An excellent free trade agreement would consist of precisely one line of text:
“All tariffs and all government subsidies on all goods and services will be eliminated effective immediately.”
Mike “Mish” Shedlock