Three-month federal gas tax holiday in the cards

New York Construction Report staff writer

President Joe Biden on Wednesday asked Congress to suspend the federal gasoline tax for three months, to help tackle record pump prices and provide temporary relief for American families this summer.

“We can bring down the price of gas and give families just a little bit of relief,” Biden said in a White House address.

The price of gas is up dramatically around the world, and by almost $2 per gallon in the U.S., since Putin began amassing troops on the border of Ukraine.

Specifically, Biden is calling on Congress to suspend the federal gas tax for three months, through September, without taking any money away from the Highway Trust Fund. And he is calling on states to take similar action to provide some direct relief, whether suspending their own gas taxes or helping consumers in other ways.

Right now, the federal government charges 18 cents per gallon of gasoline and a 24 cent tax per gallon of diesel fuel. Those taxes fund critical highways and public transportation, through the Highway Trust Fund. But in this unique moment, with gas prices near $5 a gallon on average across the country, President Biden is calling on Congress to suspend the gas tax for three months – until the end of September – to give Americans a little extra breathing room as they deal with the effects of Putin’s war in Ukraine.

The President is also calling on Congress to make sure that a gas tax holiday has no negative effect on the Highway Trust Fund. With our deficit already down by a historic $1.6 trillion this year, the President believes that we can afford to suspend the gas tax to help consumers while using other revenues to make the Highway Trust Fund whole for the roughly $10 billion cost.

In addition to federal gas tax relief, the President is calling on state and local governments to provide additional consumer relief. Already, some states and local governments have acted: for example, in Connecticut and New York, governors temporarily suspended their gas taxes, and in Illinois and Colorado, governors delayed planned tax and fee increases.

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