What a gas tax holiday would actually do
Summary
Some Democrats have proposed temporarily stopping the federal gas tax to help lower fuel prices for consumers. While this could reduce prices a bit, it would also reduce funding for road maintenance and has not been adopted by Congress or President Trump's administration.Key Facts
- The federal gas tax is 18.3 cents per gallon for gasoline and 24.3 cents for diesel.
- Suspending the tax might lower gas prices by about 9% to 14%, but prices recently rose nearly $1.50 per gallon since the start of the war affecting oil shipments.
- Congress must approve any suspension of the gas tax; so far, it has not done so.
- The gas tax funds the Highway Trust Fund, which pays for road and infrastructure maintenance.
- Suspending the tax for five months could reduce federal revenue by $17 billion and increase the federal deficit by about $12 billion.
- Some states like Georgia and Indiana have temporarily cut their own fuel taxes.
- The White House says a federal gas tax suspension is not currently being considered.
- Political pressure to suspend the tax may grow if gas prices stay high and the situation continues.
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