In his recent budget request to Congress, the president proposed a $10.25-per-barrel fee on crude oil to fund transportation projects. If implemented, this new tax would paralyze the economy, undermine our competitiveness in the global energy market, and raise prices at the pump by more than 10 percent.
The timing of the president's proposal couldn't be worse. The oil industry supports 9.8 million jobs in the United States and accounts for 8 percent of the economy. It's suffering from its worst financial crisis in 25 years thanks to a 70 percent drop in the price of crude oil over the past year and a half.
Consequently, energy companies have had no choice but to let people go. Shell has cut its workforce by 10,000. BP recently announced it will eliminate 3,000 jobs. Haliburton has laid off 22,000 workers since the beginning of 2015.
Meanwhile, some smaller energy companies simply can't stay afloat. For example, Samson Resources of Oklahoma and Texas-based Hercules Offshore and Swift Energy have filed for bankruptcy.
The ripple effect throughout the economy has been a return to sluggish overall growth: in the last quarter of 2015, the U.S. economy grew at only 0.7 percent, lower still than the already anemic 2 percent the quarter before. Economists are sounding alarms about the possibility of another recession.
President Obama's oil tax would kick the industry while it's down. Robust economic growth is simply incompatible with an energy sector flat on the canvas.
The president's proposed oil tax would also snuff out America's opportunity to become the premier energy superpower worldwide.
Before the price of oil dropped, our country was well on the way. Surging domestic production looked to erase decades of dependence on foreign energy sources, especially in the volatile Middle East.
In 2014, our nation passed both Russia as the world's largest producer of natural gas and Saudi Arabia as the world's leader in oil production. As of last June, the United States produced 9.3 million barrels of crude oil daily - nearly double the figure from ten years before. Such progress was unthinkable even a decade ago.
Congress, to its credit, has attempted to seize this opportunity. Last December, legislators lifted the oil export ban, thereby allowing domestic companies to export crude for the first time in more than 40 years. The move has the potential to lower gas prices by 12 cents per gallon and ensure the United States can play a stronger, more competitive role in international markets.
But none of this will materialize if President Obama gets his oil tax. If our country is going to remain on top, our energy sector needs policies that nurture it, not punish it.
And though the tax is aimed at oil companies, everyday Americans will get stuck with the bill. Under the tax, drivers will have to pay an extra 25 cents or more per gallon. Especially hard hit will be low-income Americans, who spend a greater share of their income on gas than those better off.
Unfortunately, instead of trying to help our troubled economy regain its footing, President Obama wants to go the other way to score political points. If his ill-conceived tax is implemented, that'll mean big harm to the economy, and a big bite out of Americans' wallets.
Drew Johnson is a senior fellow at the Taxpayers Protection Alliance.