Report questions economic impact of Obama oil tax

Republicans are circulating a new report raising questions about the economic impact of President Obama’s plan to assess a tax on oil.

The report, from the Congressional Research Service, concludes that the economy could sag as oil companies pass on the bulk of the fee to consumers.

{mosads}It stresses that researchers are likely to be concerned about the fee’s impact on the economy at large, including “employment and jobs, economic growth and inflation.”

“Since it is likely that the oil fee would be shifted forward by the oil companies, and since petroleum products enter into many products, consumers will likely see higher prices, not only directly for gasoline and other consumer products, but, in general, for many products to varying degrees,” said the report, which was commissioned by Republicans on the Senate Energy and Natural Resources Committee and released by Chairwoman Lisa Murkowski (R-Alaska). 

“The fee would likely result in decreased discretionary consumer purchasing power which may translate into lower expected economic growth,” the report concluded.

Republicans have roundly criticized Obama’s oil tax proposal, which the White House said would fund a broad plan to reduce carbon pollution from the transportation sector. 

The tax idea is dead in the GOP-controlled Congress, but Republicans indicated Tuesday that the CRS report is just the opening salvo in their public fight against it.

“This report is only the beginning of the analytical work that my Committee staff will release as we review the administration’s budget proposal,” Murkowski said in a statement.