Dear Mr. Berko: Please answer the following two questions for me. A co-worker believes that Congress wants to add a $10 tax on each barrel of oil used in the U.S. to pay for infrastructure improvement. How much would that add to the price at the pump? In the same discussion, he said Congress will be changing the Roth IRA rules. Why would Congress do that?
— M.P., Rochester, Minn.
Dear M.P.: It’s all true, according to retired CPA Helen Highwater from Kokomo!
In June, some members of Congress floated a proposal for a $10 tax on every barrel of oil. This tax would fund needed infrastructure upgrades. And I’m told there’s a few billion dollars for Elon Musk’s Hyperloop train system. The Hyperloop, according to Musk, will zoom you from L.A. to New York City in 45 minutes. That’s about 4,000 miles per hour! So for every barrel from overseas or pumped from U.S. soil, Congress wants a $10 tax. Washington calls this a tax on big oil, not a tax on a barrel of oil. Disingenuous?
If Congress passes this legislation, I’ll give you my FBI guarantee that neither a pence nor a farthing of that $10 will come from big oil. According to the American Petroleum Institute, big oil will fight this tax to the death because it would swallow an enormous amount of its profits. As a result, every penny of that tax would most likely trickle down to the motorists because big oil probably would raise the price at the pump. Economist Nicolas Loris of The Heritage Foundation guestimates that the cost would be 22 cents a gallon, and Forbes suggests 25 cents. But that would be a drop in the bucket. Infrastructure improvement requires trillions, not billions, and this might be the beginning of much higher fuel prices. A gallon of gas in London costs over $9.
