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Obama budget seeks $10.25 a barrel tax on oil phased in over 5 years

WASHINGTON -- President Barack Obama's 2017 budget proposal released on Tuesday calls for a $10.25 per barrel tax on oil phased in over five years, slightly higher than the White House said last week.

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U.S. President Barack Obama speaks during a meeting with members of his national security team and cybersecurity advisors on new actions to enhance the nation's cybersecurity, including measures that are outlined in the President's FY2017 Budget proposal at the White House in Washington February 9, 2016. (Kevin Lamarque/Reuters)

WASHINGTON -- President Barack Obama's 2017 budget proposal released on Tuesday calls for a $10.25 per barrel tax on oil phased in over five years, slightly higher than the White House said last week.

The proposal would raise $319 billion over 10 years.

The U.S. Treasury said in a fact sheet that the tax would apply to both imported and domestically produced oil, but would not be collected on U.S. oil shipped overseas.

The plan would also temporarily exempt home heating oil from the tax. Many Americans in the northeast United States rely on home heating oil. The Obama administration would set aside 15 percent of revenue for relief for households with "particularly burdensome energy costs."

The oil tax would be adjusted for inflation annually.

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The White House said the tax "creates a clear incentive for private-sector innovation to reduce America's reliance on oil and invest in clean energy technologies that will power our future."

The White House said on Thursday that a proposed $10 per barrel tax would be paid by oil companies in order to boost spending on transportation infrastructure, including mass transit and high speed rail, and autonomous vehicles.

Republicans in Congress have called the oil tax proposal "dead on arrival."

House Speaker Paul Ryan, a Wisconsin Republican, said the "oil tax alone would raise the average cost of gasoline by 24 cents per gallon, while hurting jobs and a major sector of our economy."

He noted that no prominent Democrats in Congress have publicly endorsed the proposal.

“The budget that President Obama released today does not recognize the nation’s crucial need to get its fiscal house in order and is more of the same: more spending, more taxes and more government,” Sen. John Hoeven said in a statement.

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