President Obama Proposes $10-Per-Barrel Tax on Oil

President Obama has proposed a $10-per-barrel tax on oil, phased in over five years, to fund transportation-related projects including new railroad lines, improvements to roads and highways, preparation for self-driving cars and other “clean transportation” initiatives.

The proposed tax was included in the budget the White House sent to Congress Feb. 9.

The White House said the money was needed for investments in new projects and to ensure “the long-term solvency of the Highway Trust Fund to ensure we maintain the infrastructure we have.”

The White House said $20 billion per year of the tax proceeds would be used to expand transit systems, fund high-speed rail system, update the nation’s freight transportation network and support local projects. Another  $10 billion per year in revenues to help state and local governments design transportation projects. About $2 billion per year would fund research and development in “smart, clean vehicles.”

The oil tax, when fully implemented, would equal about 24 cents per gallon.

Republicans in Congress dismissed the proposal. House Speaker Paul Ryan said it would be “dead on arrival in Congress.”

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