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Thursday, February 11, 2016

$10-A-Barrel Oil Tax Could Add $3.50 To Average Fill-Up

Melissa Cassidy pumps gas into her car from a pump with a sign indicating the gas is containing up to 10 percent ethanol at Victory gas station on November 15, 2013 in Pembroke Pines, Florida. (Joe Raedle/Getty Images)

Politico estimates a $10-a-barrel tax could raise gas prices by as much as 25 cents a gallon. (Joe Raedle/Getty Images)

As part of the budget plan unveiled this week, President Obama would dramatically increase spending on “clean transportation infrastructure,” including high-speed rail, self-driving cars and incentives for states to improve mass transit.

To pay for it, he would add a $10-per-barrel tax to oil, which would probably get passed on to the consumer in higher gas prices. Republicans in Congress criticized that idea, and Obama’s budget is considered dead-on-arrival on Capitol Hill. But the president’s oil tax idea is sparking a debate about how to pay for improvements to transportation infrastructure.

Politico estimates the $10 tax could raise the price of a gallon of gas by as much as 25 cents. That would mean an additional $3.50 to fill up a 14-gallon gas tank.

Ray LaHood, a Republican, was President Obama’s first transportation secretary. He now is co-chair of the pro-infrastructure lobbying group Building America’s Future. LaHood tells Here & Now’s Robin Young that the oil tax is an innovative idea, and if he was still in Congress, he’d either vote for it or for an increase in the gas tax that funds the Highway Trust Fund, which hasn’t been raised since 1993.


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Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

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