It's the last year of President Obama's presidency. He doesn't have to stand for reelection. Congress isn't going to pass any of his proposals anyway. So he may as well dream big.
That's one way to read this new idea Obama's putting forward: He's suggesting that Congress slap a $10-per-barrel tax on oil, phased in over five years, in order to fund $300 billion worth of investments in "clean transportation" over the next decade. That would mean massively increased spending on mass transit, high-speed rail, self-driving cars, freight upgrades, and so on.
None of this is going to pass Congress anytime soon — House Republicans have already vowed to block it — so any discussion here is purely academic. But there are a few points to make about this plan:
1) In theory, there's not a huge difference between a broad oil tax and a tax on gasoline. An oil tax might sound better — the White House says it will be "paid for by oil companies" — but the costs presumably pass through to consumers anyway. As a rule of thumb, a $10-per-barrel increase in the price of crude oil translates into a roughly 24-cent-per-gallon increase in the price of gasoline.
2) That said, there are a few smaller differences. A gasoline tax mainly affects drivers; a broader oil tax would hit air travel, home heating, and a few other sectors as well. What's more, a per-barrel oil tax would be a bit more work to implement, since we've never done this before. By contrast, the United States already has a federal gasoline tax, so it'd be much simpler to just hike that.
3) If you were going to tax oil or gasoline, right now would be the time to do it. The price of crude oil has been plummeting over the past year, down to around $30 per barrel, a level not seen since 2004. A $10/barrel tax would lift that to $40 per barrel, which is roughly the (still-low) price we saw... last November. ...
There is no reason why a politician should pull their punches because a proposal doesn't have a chance to pass. At some point, policies that don't have a chance to pass become policies with a chance to pass.
*As of 2/5/16 at 12:57 pm, Greg Mankiw hasn't noticed.