EDITORIAL: Obama’s slick oil tax

OPINION:

When every problem looks like a shortage of cash, every solution looks like a tax. President Obama sees a $10 surcharge on every barrel of oil the nation consumes as the key to fixing America’s transportation system. The dramatic decline in global oil prices has put money back into the pockets of Americans, and predictably, the president intends to seize what he imagines is his “fair share.” His “green” dream won’t come true, though, without a helping hand. Republicans in Congress aren’t, at the moment, about to lend one.

If the president’s $4.1 trillion fiscal 2017 budget weren’t already dead on arrival, as House Speaker Paul Ryan says it is, his request for $300 billion over 10 years for his pet transportation projects would kill it. Racking up bills that push the national debt above $19 trillion will do that. The president would devote $20 billion a year to alternative transportation such as high-speed rail and urban mass transit. Another $10 billion would go for “better land-use planning, clean fuel infrastructure, and public transportation” to reduce greenhouse gases. Developing the technology for self-driving vehicles would get $3 billion.

With the global economic slowdown causing oil consumption to tumble more than 70 percent during the past 19 months, the president must think no one will notice if he adds a $10 premium to every barrel. “We’ll look back and say that was a smart investment,” he says. “It’s right to do it now, when gas prices are really low.” (Spoken like a man who consumes free gasoline in government limousines.)

However, it’s difficult not to notice that drillers are closing wells and laying off workers with stock markets in tailspins. The president’s tax would subtract an additional $32 billion from industry balance sheets. Business taxes are always passed along to consumers — in this case, drivers of automobiles — and would add 25 cents to the price of a gallon of gasoline. Gasoline is relatively inexpensive now, but that extra quarter will be much dearer when pump prices return to their usual $3 range.

The federal government already collects an 18.4-cent tax on each gallon of gasoline for the Highway Trust Fund, and that bounty is routinely tapped for the “green” projects the president yearns to favor with new tax dollars. With none of the money earmarked for highways, it’s clear that Mr. Obama is riding shotgun for mass transit.

Until Washington makes an honest attempt to end government waste and fraud, Americans aren’t likely to get on board with the president’s call for higher taxes. Examples of misused dollars are plentiful. The Government Accountability Office says federal agencies squandered $125 billion in improper payments for programs in 2014, ranging from Medicare to weapons systems. The Internal Revenue Service handed out $92 million in employee bonuses between 2009 and 2012 while hounding taxpayers suffering through the Great Recession. Millions charged to government-issued credit cards were misspent at beauty shops, gyms, gift shops and on “adult escort services.” The careless spending of public money is frequently denounced but rarely halted.

If Mr. Obama’s scheme isn’t likely to pass this Congress, it might be a blueprint for Democrats if they retain the White House in November. Wary Americans recognize the president’s oil tax as just a way to pile on mounting debt.