If Congress grants President Joe Biden’s request and suspends the federal gas tax, will that translate into sharply reduced gas and diesel prices? No.
If Congress has voted to suspend the federal tax – which seems unlikely to date – oil companies will not be obliged to let their prices stagnate. And states also impose gas taxes, although a handful of them have suspended them.
Biden tells congress to suspend federal gas tax
Biden tweeted the request to Congress this week, citing Putin’s invasion of Ukraine as the reason for the average $2 a gallon increase in gas and diesel prices.
Is the federal gas tax suspension likely?
Both Democrats and Republicans seem to believe that a suspension of the federal gas tax, which is referred to as a holiday, is not likely or beneficial. Even Representative Peter DeFazio, a Democrat who heads the House Transportation and Infrastructure Committee, did not support Biden’s request.
DeFazio called Biden’s tweeted request a “short-sighted proposal” that would rely on “the cooperation of oil companies to pass on minuscule savings to consumers.” He added that a suspension of the federal gas tax “would blow a multi-billion dollar hole” in future financing of infrastructure projects.
What is the federal gas tax?
The federal gas tax is a surcharge levied on gas and diesel prices. Currently, federal gas tax rates are 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel.
The fuel tax does not stop there. States also levy a tax, the money of which is earmarked for infrastructure projects. The average state fuel tax is 31 cents.
In other words, the total tax on combining federal and state taxes averages 49 cents for gas and 55 cents for diesel.
Which States Have the Highest Fuel Taxes?
Here’s the top ten, with the gas tax rate first, followed by the diesel tax rate. Two states, California and Indiana, have increased their state gas taxes in the past two weeks. Remember that federal rates of 18.4 and 24.4 would be added to these totals.California 70.95 and 102.11Illinois 59.6 and 67.02Pennsylvania 58.7 and 75.2Hawaii 51.69 and 52.41Indiana 50.79 and 56.00Nevada 50.48 and 28.56Washington 49.4 and 49.4New York 48.22 and 46.98Michigan 45.17 and 47.16Florida
Are there any states that have suspended gas taxes?
Yes. Maryland was the first, with a suspension that began on March 18 and ended on April 16. Florida has pledged to suspend the gas tax for a month, beginning Oct. 1.
Three states have suspended the gas tax for different periods:New York: from June 1 to December 31. Georgia: from March 18 to July 14. Connecticut: April 1 to November 30.
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