Biden’s Gas Tax Suspension Would Save Only $7.36 Per Month, Experts Say

493
Gage Skidmore https://commons.wikimedia.org/

On Wednesday, President Joe Biden officially endorsed the suspension of the federal gas tax until the end of September to relieve Americans’ pain at the pump.

He urged Congress to temporarily lift the 18.4-cent-per-gallon federal tax on gasoline and 24.4-cent-per-gallon levy on diesel for three months. He also advocated states adopt similar measures to elevate financial pressures on motorists. According to the Epoch Times, state taxes on fuel are higher than the federal tax and a few states have already incorporated tax relief or rebates for residents.

“I fully understand that a gas tax holiday alone is not going to fix the problem, but it will provide families some immediate relief, just a little bit of breathing room as we continue working to bring down prices for the long haul,” the President said in a prepared address. At the same time, he denied Republican assertions of soaring energy prices set on the shoulders of his administration.

Biden reiterated Putin’s price hike and the oil industry’s greed as causes.

Some Democrats are breaking ranks with their commander and chief, speaking out that they disagree with the gas tax holiday, citing concerns about eroding the Highway Trust Fund, which relies on the gas tax to pay for road projects.

“Suspending the federal gas tax will not provide meaningful relief at the pump for American families, but it will blow a multi-billion-dollar hole in the highway trust fund,” House Transportation and Infrastructure Committee Chair Rep. Peter DeFazio (D-Ore.) said. The Oregon Democrat emphasized the plan was “well-intentioned but ill-conceived,” according to the Washington Times.

“I’m going to look at it — certainly — sympathetically, in the sense that the president is trying to do what I think is a good objective,” said House Majority Leader Steny H. Hoyer (D-MD). “What I’m not sure of is, in fact, that will have the intended effect … and whether it will save consumers money.”

On Wednesday, Kiplinger made a case for the tax break, not giving much of a break but instead breaking the Highway Trust Fund bank to the tune of $10 billion.

“A person who drives 12,000 miles a year in a car that averages 25 miles per gallon would only save $7.36 per month if the federal gas tax was suspended,” the analysis reads. “But on the other hand, the overall loss of tax revenue in the federal Highway Trust Fund would be high, estimated by the White House to be about $10 billion. That’s money that wouldn’t be available for road repairs and other needed infrastructure projects.”

Economists have pointed to supply and demand as the price-increasing culprit.

Analyst Alex Muresianu of the Tax Foundation, an independent think tank in Washington, said, “If prices are going up, subsidizing demand doesn’t make a whole lot of sense. That would make the problems worse.”

Frank Macchiarola of the American Petroleum Institute said policymakers focusing on “short-term fixes in lieu of long-term solutions” isn’t an answer that brings relief.

“If Washington is serious about delivering relief to consumers, then they should be focused on policies that encourage increased U.S. production and address the global mismatch between energy demand and available supply,” he said.

The needle swings back to domestic energy production and independence.