Biden urges 3-month suspension of gas, diesel taxes
WASHINGTON – President Joe Biden on Wednesday called on Congress to suspend federal gasoline and diesel taxes for three months – an electionyear move meant to ease financial pressures that was greeted with doubts by many lawmakers.
The Democratic president also called on states to suspend their own gas taxes or provide similar relief and delivered a public critique of the energy industry for prioritizing profits over production. Still, his announcement depends on the actions of lawmakers in Washington and in statehouses across the country.
“It doesn’t reduce all the pain, but it will be a big help,” Biden said, using the bully pulpit when his administration believes it has run out of direct levers to pull to address soaring gas prices. “I’m doing my part. I want Congress, states and industry to do their part as well.”
At issue is the 18.4 cents-a-gallon federal tax on gas and the 24.4 cents-agallon federal tax on diesel fuel. If the gas savings were fully passed along to consumers, people would save roughly 3.6% at the pump when prices are averaging about $5 a gallon nationwide.
Biden’s push faces uphill odds in Congress, which must act in order to suspend the tax, and where many lawmakers, including some in his own party, have expressed reservations. Even many economists view the idea of a gas tax holiday with skepticism.
The president said “states are now in a strong position to be able to afford to take some of these actions,” thanks to federal support from the 2021 COVID-19 relief bill, but there is also no guarantee states will tap into their budgets to suspend taxes on gas or deliver rebates to consumers, as Biden is requesting.
Barack Obama, during the 2008 presidential campaign, called the idea a “gimmick” that allowed politicians to “say that they did something.” He also warned that oil companies could offset the tax relief by increasing their prices.