How a Texas Lawmaker’s Proposal Could Bump Up Gas Prices by 40 Cents

While the low price of oil has strained the oil and gas industry and Texas tax revenues, it’s been good news for regular folks at the pump. The price of a gallon of unleaded costs around two dollars right now, but that may not last.

By Michael MarksFebruary 16, 2017 5:17 pm

A Congressional proposal led by Representative Kevin Brady of The Woodlands could bump the price of gas up by 40 cents per gallon. The proposed “border adjustment tax” would impose a 20 percent tax on imports, which companies would most likely pass down to consumers.

R.G. Ratcliffe, a writer for Texas Monthly, says the underlying idea behind the tax is to give US companies an incentive to keep their factories in the United States.

The most obvious effect of this tax will be the an increase in the price of gasoline, Ratcliffe says. While the tax would spur domestic production and consumption of oil and maybe even drive down prices in the long run, Ratcliffe says consumers could expect their wallets to be hurt in the meantime.

“It’s kind of a mixed bag,” Ratcliffe says. “The big question is: are Texas consumers willing to pay this to get a bigger picture boost?”

What you’ll hear in this segment:

—Where US consumers could expect to see prices rise.

—What the benefits of this tax might be.

—What are the chances this tax will be approved?

Written by Morgan O’Hanlon