Lawmaker Proposes Tax on Crude Oil Contracts

Rep. Peter DeFazio, D-Ore., believes another kind of fuel tax could be the cure for the Highway Trust Fund’s ills: a tax on crude oil contracts.

DeFazio is calling for a 0.02 percent tax on crude oil futures contracts, with an additional 0.5 percent tax on crude oil options.

The outspoken congressman is a subcommittee chairman of the House Transportation Committee, which drafted the Surface Transportation Authorization of 2009, an ambitious overhaul of federal transportation policy and financing.

The bill carries a $450 billion price tag over six years, approximately double what current revenue sources can bear, especially the Highway Trust Fund, which the administration projects will be insolvent by August.

DeFazio called the proposal a “win-win,” because it would increase revenue and dissuade speculators from driving up the price of oil. Airlines, railroads and other end-users that hedge the price of fuel would be exempt from the tax.

The oil futures tax would raise $190 billion over the six-year span of the bill, or $31.7 billion per year, DeFazio said.

Contact R.G. Edmonson at bedmonson@joc.com.