Democratic Lawmakers Want to Temporarily Suspend Federal Gas Tax

February 11, 2022 Topic: Gas Prices Region: United States Blog Brand: Politics Tags: Gas TaxInflationRising Gas PricesFederal Taxes

Democratic Lawmakers Want to Temporarily Suspend Federal Gas Tax

Two Democratic Senators introduced a bill that would suspend the federal tax of 18.3 cents per gallon of gasoline and 24.3 cents per gallon of diesel fuel.

 

Democrats have long been seen to support a "tax-and-spend" policy, and many in the progressive wing of the party have even called for higher taxes on fossil fuels in recent years to help drive support for and innovation towards renewable energy. However, a pair of Democratic Senators on Wednesday unveiled a proposal to temporarily suspend the federal gas tax as a way to help America cope with surging oil prices.

"Federal taxes include excise taxes of 18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel fuel, and a Leaking Underground Storage Tank fee of 0.1 cents per gallon on both fuels," the U.S Energy Information Administration (EIA) explained.

 

The Gas Prices Relief Act, which was introduced by Sens. Mark Kelly (D-Ariz.) and Maggie Hassan (D-N.H.), would eliminate federal gas tax for the remainder of 2022. The gas tax rate has remained constant since 1993.

"People are feeling a real pinch on everyday goods, and we must do more to help address rising costs, particularly the price of gas," Hassan said in a statement. "We need to continue to think creatively about how we can find new ways to bring down costs, and this bill would do exactly that, making a tangible difference for workers and families."

Highway Trust Fund

The federal gas tax is used to pay for the Highway Trust Fund, which covers expenses including highway construction and public transit. The bill would also require the Treasury Department to deposit general funds into the trust fund to make up for the lost tax revenue and to ensure the fund remains solvent.

Opponents warn that it could require further borrowing, and the bill would further direct the Treasury Department to monitor the program in order to ensure that oil and gas companies pass along the savings to consumers, Fox Business reported.

The current national average for a gallon of gasoline was $3.45, about $1 more than a year ago according to AAA. In California, drivers are paying well over $4 per gallon, and prices are only expected to climb higher as the country enters peak driving season.

Driving Prices Higher

Winter weather and the possibility of sanctions against Russia over its potential invasion of Ukraine have both played a role in keeping the price of oil high, according to AAA.

“Arizonans are paying some of the highest prices for gas we have seen in years and it's putting a strain on families who need to fill up the tank to get to work and school,” Kelly said via a statement. “This bill will lower gas prices by suspending the federal gas tax through the end of the year to help Arizona families struggling with high costs for everything from gas to groceries.”

Four other Democrats – Sens. Debbie Stabenow (D-Mich.), Catherine Cortez Masto (D-Nev.), and Jacky Rosen (D-Nev.), and Raphael Warnock (D-Ga.) – have signed on as co-sponsors of the bill, but it still faces an uphill battle in the 50-50 Senate. Cortez Masto, Warnock, Hassan, and Kelly are all up for reelection in November.

Democratic and Republican governors have already proposed some of their own changes to state gas taxes ahead of the summer driving season. These proposals included either freezing state gas tax collection or stopping planned increases from taking effect.

Even with these cuts, driving is likely to be a lot more expensive this year.

Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military small arms, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on Amazon.com.

Image: Reuters.