The administration has proposed a $10 per barrel tax on oil producers to fund a sweeping set of green transportation initiatives. The tax would be phased in over a period of five years and is being billed as part of the fight against climate change.
Investors should note that this is, in effect, a $0.25 per gallon increase on gasoline prices. Taxes at the corporate level are almost always passed through to the customer. At the end of the day, this is a tax on energy use and will hit the least advantaged the hardest.
Investment decisions should reflect the real impact of this proposed measure.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA®