Joe Biden Wants to Issue Gas Tax Holiday to Help Americans | Here's How Much It Will Actually Save You Per Gallon
U.S. President Joe Biden urged Congress to temporarily suspend the federal gas tax amid the rising fuel prices.
CNBC News reported that some experts say a suspension could be an immediate relief to consumers. However, it could also keep demand elevated, which would worsen the already tight supply.
The federal tax is 18 cents per gallon of regular gasoline and 24 cents per gallon for diesel.
Biden has also called on states to suspend their gas taxes or find other ways to provide relief for consumers.
The White House said in a statement that a suspension would provide citizens a little "extra breathing room" as they face the effects of "Putin's war in Ukraine."
Patrick De Haan, head of petroleum analysis at GasBuddy, said that if the bill is signed and enacted, it will help motorists.
De Haan, however, noted that the extent to which any relief is felt will depend on wholesale prices remaining stable.
In addition, the wording and timing of any possible legislation will also have an effect.
Gas Tax Holiday
Congress has not increased the federal tax since 1993. However, it has not lifted the tax either.
The New York Times noted that taxes on gasoline and diesel now supply a majority of federal funding used to build and maintain highways. In 2019, it was worth $36.5 billion.
The Congressional Research Service estimated that a typical U.S. family would have saved $163 over the year, if no federal gas tax had been in place in 2020.
It would mean a savings of $13.58 per month, according to a CBS News report.
It was reported that those who drive the most would save more, including drivers of larger cars, which have worse fuel mileage, and rural and suburban residents.
Biden is calling for an entire three-month tax waiver, which would translate into savings of $40 per family.
University of Pennsylvania's Wharton School's research findings that a 10-month gas tax suspension would save a grand total of $16 to $47 per person for the whole period.
The Wharton research also found that when Connecticut, Georgia, and Maryland suspended their state gas taxes earlier this year, motorists got between 58 percent and 87 percent of the savings.
Biden called for fuel companies to pass on "every penny of this 18 cents reduction to consumers."
U.S. Gas Price
Sen. Rick Scott of Florida, the chairman of the Senate Republicans' campaign arm, raised concerns about where the federal government would find revenue normally generated from the gas tax.
Biden answered those concerns, saying that suspending the gas tax will have an effect but it is not going to have a major impact on main road construction and major repairs.
The suspension of taxes would cost around $10 billion, with senior administration officials saying that the president would ask Congress to dip into other budgets to backfill the loss.
The per-gallon national average reached $4.955 on Wednesday, which is an increase of 36 cents in the last month and $1.88 more than last year.
READ MORE: Gas Prices in California: How Much Will You Be Paying for Gas in California Amid Price Hikes?
This article is owned by Latin Post.
Written by: Mary Webber
WATCH: Biden Proposes Suspension Of Federal Gas Tax - from MSNBC
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