ABSTRACT
Candidate Bill Clinton campaigned against a hike in the federal gas tax; he rightly called the levy, which, along with state and local taxes now accounts for roughly one-third of gasoline's price at the pump, "back-breaking". Tax bills have traditionally provoked an orgy of self-dealing and logrolling amongst legislators, lobbyists, and interest groups, and the British thermal units (BTU) tax proved to be no exception. The administration initially proposed taxing natural gas as the wellhead and coal at the mine. Under pressure from producers, Clinton agreed to collect the tax after the gas left the pipeline and from the end users of the coal. Moreover, the Btu tax would have disproportionately burdened the poor as well as energy-intensive firms and states. At the same time, the alleged conservation benefits of the administration proposal were minuscule; indeed, the measure would have punished "environmentally friendly" energy sources like hydro and nuclear power.
