Federal Gas Tax Holiday

The White House says a gas tax holiday will provide "breathing room" for drivers as inflation has soared to a 40-year high, pushed by fuel prices.

Biden also renewed his call for oil companies to increase refinery capacity and output and for retailers to pass savings on to consumers as the price of oil lowers. Pelosi resisted the idea of a gas tax holiday earlier this year. In Maryland, 72% of all tax savings passed to consumers, the study found. In February, a coalition of Senate Democrats from battleground states – including Raphael Warnock of Georgia, Mark Kelly of Arizona and Maggie Hassan of New Hampshire – proposed suspending the gas tax through the end of the year. All 50 states, as well as the District of Columbia, impose a gasoline tax, the revenue from which typically pays for transportation and other infrastructure projects. Environmentalists argued a gas tax holiday undermines the goal of moving toward clean energy. “This isn’t an idea designed to get you through the summer," Obama said at the time. A federal gas tax holiday, floated over the years but never enacted, has plenty of critics. A three-month federal gas tax holiday would suspend a tax of 18.4 cents per gallon of gas and 24.4 cents for diesel that drivers pay when they fill their tanks. The national average for a gallon of gas was $4.968 on Wednesday, according to AAA, jumping more than $1.50 since Russia's invasion of Ukraine in February. Biden wants Congress to offset the loss of highway funds – about $10 billion – with other federal tax revenue. The White House never rallied behind the legislation, which did not advance, but remained open to it publicly.

President Biden said Wednesday that he wants Congress to give consumers a break on the federal gas tax for the summer months. That would mean the government ...

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Biden may want to appear to be doing something to address high inflation, which is both an economic concern and a growing political problem for his ...

Biden is urging oil companies to pass the tax cut on to drivers but there is no way for him to enforce this. But Biden will be able to say he tried to do something about gas prices. The impact of a federal gas tax holiday would be extremely modest. Temporarily ending the tax, already insufficient to fund the Highway Trust Fund, would require the federal government to borrow more to pay for improvements to roads, bridges, and ports, which also would add to inflationary pressures. But when supply is extremely limited, as it is today, even more of the benefit goes to producers. Biden’s gas tax holiday announcement, if it comes, might be little more than political theater. How will a combination of extremely volatile prices, the effects of COVID-19, and the increases in telecommuting opportunities affect consumption? It only increases demand for energy and encourages the use of fossil fuels. It is hard to know exactly how much the tax cut would affect driver behavior. But, either way, drivers would buy more gas, which is exactly the wrong response when supplies are limited. Gas prices skyrocketed in recent months because of a growing imbalance between oil supply and demand. President Biden is proposing a three-month federal gasoline tax holiday.

That's why he has taken action in recent months to boost the supply of oil and gas, including an historic release from the Strategic Petroleum Reserve, and ...

And, around the country, in states like Michigan and Minnesota, states and local leaders are considering a number of forms of consumer relief – from temporary suspensions and pauses on state sales tax on gas to consumer rebates and relief payments. Already, the United States produced more oil under the first year of this Administration than it did under the first two years of the prior Administration, and is on track to set new records next year. This is consistent with legislation proposed in the Senate and the House to advance a responsible gas tax holiday. Those taxes fund critical highways and public transportation, through the Highway Trust Fund. But in this unique moment, with gas prices near $5 a gallon on average across the country, President Biden is calling on Congress to suspend the gas tax for three months – until the end of September – to give Americans a little extra breathing room as they deal with the effects of Putin’s war in Ukraine. In addition to federal gas tax relief, the President is calling on state and local governments to provide additional consumer relief. The price of gas is up dramatically around the world, and by almost $2 per gallon in America, since Putin began amassing troops on the border of Ukraine. President Biden understands that high gas prices pose a significant challenge for working families.

President Joe Biden called on Congress and state legislatures to provide a temporary reprieve from gas taxes via holida.

The nationwide tax on diesel is 24 cents a gallon. Most of the 18.4 cent reduction would be pocketed by industry — with maybe a few cents passed on to consumers.” He also asked petroleum companies to increase the number of refineries producing gas for vehicles. Please see our republishing guidelines for use of photos and graphics. But still goes in the wrong direction.” “There’s no time now for profiteering.” The Permian Basin is the largest petroleum-producing basin in the United States. (Joe Raedle/Getty Images) A nationwide gas tax holiday, he added, would likely add to inflation, though not by much “because the majority of it would be windfall profits for the oil industry and that is not particularly stimulative. “Whatever you thought of the merits of a gas tax holiday in February it is a worse idea now,” he tweeted. And he said companies should pass on the slightly lower price of gasoline per barrel to consumers as well as the savings from any gas tax holiday, instead of keeping it themselves. “I call on the companies to pass this along, every penny of this 18-cent reduction, to the consumers,” Biden said, referring to the federal gasoline tax. WASHINGTON — President Joe Biden on Wednesday called on Congress and state legislatures to provide a temporary reprieve from gas taxes — but members of his own party and Republicans appeared opposed, making it look unlikely on the federal level.

Facing stubbornly high gas prices that average about $5 a gallon nationwide, President Joe Biden has urged Congress to suspend federal gasoline and diesel ...

“They’re under a lot of pressure because of the high gasoline prices. Biden says the gas tax holiday can provide some direct relief to consumers, and he is calling on states to follow suit by suspending their own gas taxes or helping consumers in other ways. But the White House says the money could be transferred from other government accounts and that infrastructure remains a top priority for the president. The price of gas is up dramatically around the world — and by nearly $2 per gallon in the United States — since Russian President Vladimir Putin began amassing troops on the border of Ukraine. High gas prices pose a fundamental threat to Biden’s political and policy ambitions. A Penn Wharton Budget Model analysis says recent suspensions of state gasoline taxes in Maryland, Georgia and Connecticut were mostly passed onto consumers in the form of lower gas prices. He also worried it may not be temporary, as the White House suggested. Are we going to raise prices right before an election?″ Goldwein asked in an interview. But Mark Zandi, chief economist at Moody’s Analytics, said high gas prices are “the number one financial problem for many American households,″ especially those with low incomes. While small, a gas tax holiday “is a step to help these households,″ Zandi said. The lost revenue would otherwise go to the Highway Trust Fund, which finances most federal government spending for highways and mass transit. No, I do not support in any way degrading that contribution to rebuilding our crumbling infrastructure.” Rep. Peter DeFazio, D-Ore., chairman of the House Transportation and Infrastructure Committee, said he opposes the tax suspension in part because it provides minuscule relief and could become permanent.

President Joe Biden is calling for a federal gas tax holiday as Americans deal with higher prices at the pump and as the midterm elections loom.

"I would be the Democratic nominee for president of the United States." Obama wrote that "somewhat to my surprise," his top campaign advisors agreed with him. "Based on my experience as an Illinois state senator, where I'd once voted for a similar proposal, I was sure that consumers wouldn't see much benefit. In April, Pelosi called the holiday idea "good PR," but added, "There's no guarantee that the saving, the reduction in the federal tax, would be passed on to the consumer." "The easiest thing in the world for a politician to do is tell you exactly what you want to hear," Obama said at the time, calling the gas tax holiday a "gimmick." Former President Barack Obama called opposing a federal gas tax holiday "one of our prouder moments" during his 2008 campaign — but his two-term vice president, Joe Biden, thinks that kind of holiday is much needed now that he's in charge at the White House.

President Biden is calling on Congress to suspend the federal gas tax through the end of September. · It's not clear how much of the 18.4 cents in tax savings ...

But how much of the 18.4 cents will be passed on to consumers is still unknown.” "Every state seems to have really different responses, so it's hard to say which route the federal one will follow in terms of how quickly it's going to address (gas prices)." In Maryland, 72% of tax savings were passed on to consumers. Prisinzano noted that a three-month tax break doesn’t give retailers much time to increase their supply of gasoline, which influences the price at the pump. The federal gas tax is imposed on refiners like Exxon Mobile and Chevron, which means any savings from a tax holiday would trickle down to consumers instead of going into effect directly at the pump. “Will all of that (18.4 cents) get passed on to the drivers? Patrick De Haan, head of petroleum analysis at GasBuddy, said stations benefitting from the tax break would be pressured to drop gas prices to compete with surrounding stations. Will some of it get passed on to the drivers? Tom Kloza, global head of energy analysis for the Oil Price Information Service, said families could save about $48 total through the tax holiday. “I don't think (three months is) that long a time,” he said. Gas guzzlers like SUVs and pickup trucks and people who are on the road frequently would see more savings since they require more fuel. Refiners – companies that transform crude oil into other finished petroleum products – pay the federal gas tax at terminals as they load tanker trucks with gas.

We asked four experts to explain what gas taxes are used for and whether waiving them will make much of a difference to American households.

But a gas tax holiday may not be the most effective way to deliver that relief, especially since these waivers are temporary. A gas tax waiver could temporarily help relieve people who have to rely on gasoline for transportation and who live in energy poverty. Let’s assume the entire reduction of the gas tax is passed on to the consumer. The federal government collects roughly $37 billion to $38 billion per year in revenues from the gas tax. According to the American Automobile Association, the average price of gasoline in Maryland just before the state’s gas tax holiday was $4.25 per gallon. The very poor who lack cars, urban households who rely on public transit, and the elderly, who tend to drive less, benefit less from a tax holiday because they consume less gasoline. Research shows that for decades, lower-income households have spent a larger fraction of their budgets on gasoline than higher-income households. Since most politicians strongly resist raising gas taxes, even to pay for much-needed repairs, the government has turned to less transparent alternatives. In 2020, the latest year for which numbers are available, the federal government spent roughly $46 billion on highway projects. The tax is 18.4 cents on regular gasoline and 24.4 cents on diesel. President Joe Biden called on Congress to suspend the federal gas tax to “bring families just a little bit of relief” as average gasoline prices exceed US$5 a gallon. Government data shows that in an average day, the U.S. uses about 350 million gallons of gasoline.