Gas tax suspension would provide welcome relief

I’m not a knee-jerk anti-tax fellow. While no one enjoys paying taxes, I recognise that federal, state and local levies fund a broad range of critical needs, from schools, parks, libraries and police to public health and scientific research.

One specific levy, the federal gas tax, funds highway and bridge construction, plus public transit, with projected revenues of $37 billion this year. As a native of Detroit who learned to drive on the nation’s first highway, I’m a big fan of our amazing interstate system and the US routes that feed into it. I’m even a bigger fan of the road and bridge maintenance that helps make driving safe for the country’s 280 million motor vehicles, which the federal gas tax also funds.

So I’m loath to suspend such a vital levy, which has been 18.4 cents per gallon since October 1993. I’m also loath to support President Donald Trump’s misguided war in Iran. Suspending the federal fuel tax would ease gas prices that have increased by an average of $1.52 per gallon nationwide since the war started, largely because Iran has blocked the Strait of Hormuz, through which one-fifth of the world’s crude-oil supply passes.

There’s also some irony in Trump asking Congress for a gas-tax “holiday.” When President Joe Biden made the same request in June 2022, after Russia’s invasion of Ukraine had spiked oil and gas prices, Republican lawmakers rebuffed him, and even his most reliable ally, then-House Speaker Nancy Pelosi, declined to endorse the plan. Now, a motley mixture of Democrats and Republicans is backing a gas-tax suspension. Republican Sens. Josh Hawley of Missouri and Rick Scott of Florida, along with Democratic Sens. Mark Kelly of Arizona and Richard Blumenthal of Connecticut, are among the lawmakers who have voiced support. Democrat Alex Vindman, running for the Senate in Florida, is also on board.

“I’m hearing from Democrats, independents and Republicans alike about how surging gas prices are putting the squeeze on families’ budgets,” Vindman said in a May 12 statement. While still a bit lower than the national average, the average gas price in Florida has surged from $2.88 to $4.34 a gallon since the start of the Iran war. With the national average hitting $4.53 per gallon, as of May 20, suspending the gas tax would provide only mild relief, about 4%. State gas taxes are higher in every state except Alaska, and in some states much higher, from California’s levy of 70.92 cents per gallon to 58.7 cents in Pennsylvania and 54.50 cents in Indiana. California drivers pay $6.16 per gallon on average, the highest price in the country.

“It’s a small percentage, but it’s, you know, it’s still money,” Trump said on May 11. Congress first imposed the federal gas tax in 1932 as the Great Depression drained federal coffers. It started at 1 cent per gallon. Had it merely kept up with inflation since then, the tax would be 24.4 cents today. And inflation since 1993, when Congress last raised the tax, would put it at 42.43 cents. So, if anything, the gas tax is overdue for an increase. However mild the relief might be, it would be welcome at the start of the summer vacation season, when Americans take to the roads in large numbers, and their fuel costs rise regardless of the price at the pump.

With the growing bipartisan support, Congress should pass a six-month suspension of the federal gas tax. To prevent a big hit to the Highway Trust Fund, which relies on revenue from the tax, lawmakers should adopt a plan by Kelly and Blumenthal to offset the loss of highway funds with temporary transfers of general-purpose funds from discretionary programs. If Congress wanted to get creative, it could pair indexing the gas tax to inflation in order to meet future road needs with automatic, short-term suspensions in the event of price spikes caused by war, economic shocks or other special circumstances.