President Biden Working To Stop Gas Tax During Economical Crisis

June 22, 2022

By: Piers Siedman

Biden will go to Congress at 2pm ET today with a plan to suspend the federal gas tax until September.  As a result of the record high gas prices sitting at $5, the President is hoping to ease the burden of high gas prices beginning a gas tax holiday.  The New York Post reported that the previous highest recorded by AAA was $4.114 per gallon in July 2008. 

The president will also ask states and local governments to temporarily suspend their gas taxes according to MSN News. 

The gas tax holiday is predicted to shave off 18.4 cents per gallon of gas and 24.4 cents per gallon of diesel, according to administration officials. 

However, both parties also voiced their doubts as the gas tax holiday would cost the Highway Trust Fund around $10 billion.  Nancy Pelosi, House Speaker, also expressed her doubts. President Obama said in 2008 that the gas tax holiday was a “gimmick” that allowed politicians to “say that they did something.”  Obama also said that oil companies could negate the tax relief by raising their prices.

There also has been criticism from economists.  CNN reported that a senior economic official in Obama’s administration, Jason Fuhrman wrote on Twitter “Whatever you thought of the merits of a gas tax holiday in February, it is a worse idea now,” “Refineries are even more constrained now so supply is nearly fully inelastic. Most of the 18.4 cent reduction would be pocketed by industry – with maybe a few cents passed on to consumers.”