The additional 25¢/bbl in the Obama administration’s proposed crude oil tax in its fiscal 2017 federal budget request would raise its costs over the next decade to $319 billion, a new Congressional Research Analysis found.
“This mathematical sleight of hand may look innocent, but that additional quarter actually raises the cost of the tax or ‘fee’ by nearly $8 billion,” US Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.) said on Feb. 23 as she released the new analysis.
“Far from a rounding error, this increase would only put an additional burden on America’s oil producers, which dampens our domestic energy production,” she maintained.
The White House initially proposed a $10/bbl tax on crude oil to help pay for creation of a 21st Century Clean Energy Transportation System (OGJ Online, Feb. 4, 2016). That amount represented the average cost the White House Council of Economic Advisors calculated for the first 5 years as the levy would be phased in, CRS’s new report said.
An earlier CRS analysis of the proposal found that the tax likely would result in lower general economic growth and higher costs for consumers, Murkowski said. The administration raised the amount to $10.25 bbl when it released its proposed federal budget for fiscal 2017 on Feb. 9. The proposed tax’s details remain ambiguous, the senator said.
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