Opinion | A gas tax holiday won’t fix Trump’s high gas prices
A gas tax holiday won’t fix Trump’s high gas prices
Pausing the 18-cents-per-gallon federal gas tax will barely make a dent in the surge in costs since the war in Iran began.
The national average price for gas remained above $4.50 per gallon Monday, according to AAA, with little relief on the horizon as the war with Iran remains locked in a stalemate. President Donald Trump said Monday that he would be open to suspending the national gas tax to help with the soaring costs — but it’s a proposal that would do more harm than good in the long term, while providing little immediate help for Americans draining their wallets at the pump.
Trump told CBS News on Monday that a pause on the gas tax is “a great idea” and that when the price of gas does go down, “we’ll let it phase back in.” Later that day, the president told reporters in the Oval Office that the tax would ideally be suspended until “it’s appropriate.” His comments echoed those of Energy Secretary Chris Wright, who told NBC News on Sunday that “all measures that can be taken to lower the price at the pump and lower the prices for Americans, this administration is in support of.”
At present, the federal gas tax adds on 18.4 cents per gallon of regular gasoline, 19.3 cents per gallon for planes and jet fuel and 24.4 cents per gallon on diesel fuel. The money collected goes directly to the Highway Trust Fund, a pool of funding used to pay for federal highway construction and maintenance. But however much Trump would like to temporarily wipe out this tax, only an act of Congress can alter the federal gas tax rate, even to temporarily pause its collection.
Notably, Trump isn’t the first person to think that pausing the tax is a potential political win — and it’s a policy proposal that has crossed political lines. Former Sens. Hillary Clinton, D-N.Y., and John McCain, R-Ariz., proposed a “gas tax holiday” during their presidential nomination bids back in 2008. Former President Joe Biden also called on Congress to pass a suspension back in 2022, as soaring inflation threatened Democrats ahead of the midterms.
The last time a gas tax suspension was under consideration, it was Republicans who were against the pause, mostly to deny any political cover for Biden. This time around, Trump’s backing might shift the dynamic. Senate Democrats already introduced a bill in March to suspend the gas tax until Oct. 1. After Trump’s comments, Rep. Anna Paulina Luna, R-Fla., jumped on board Monday to say that she would be introducing her own proposal as well.
But just because an idea is bipartisan doesn’t make it a good one.
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Consider that the original proposal from Clinton and McCain was panned, in part because, as Reuters reported at the time, “since refineries cannot increase their supply of gasoline in the space of a few summer months, lower prices will just boost demand and the benefits will flow to oil companies, not consumers.” If put into place today, one economist suggested that a gas tax holiday would only save drivers roughly 60 cents total per trip to the pump, a drop in the tank compared to the $1.50 per gallon leap we’ve seen since Trump launched the Iran war more than two months ago.
If anything, the federal gas tax is already too low. As the Bipartisan Policy Center recently noted, funding for the HTF is already lagging. The fixed amount was last raised since 1993 and hasn’t changed with rising inflation or increased fuel efficiency from cars requiring less gas to fill up a tank. Last year, the fund ran a deficit of nearly $13 billion, according to the Congressional Research Service, with the fund likely to run out entirely by 2028.
The average price for gas in Georgia was $4.03 Monday, lower than in most of the country. That’s due in part to a law signed by Gov. Brian Kemp pausing the state’s gas tax for 60 days. Georgia’s pause ends Friday, and drivers there are already worried about what happens if the 33-cents-per-gallon tax is allowed to snap back into place.
Meanwhile, the funds diverted from the HTF wouldn’t all flow directly back into consumers’ pockets. A 2022 estimate from the University of Pennsylvania’s Wharton School found that pauses in state fuel taxes that year only partially went to consumers, with the rest going to corporations. The same is likely true at the federal level, given that gas wholesalers pay the tax up front and gas stations aren’t reaping the same benefits as the major oil companies, leaving them less likely to slash prices by too much.
Graham Platner, a candidate for the Democratic Senate nomination in Maine, has called on eliminating the current federal gas tax altogether and funding highway maintenance with increased taxes on billionaires — but that isn’t exactly likely to fly under the current GOP-controlled Congress.
While I’m all for reducing America’s overreliance on cars to get around, leaving the highways to crumble with no alternative doesn’t seem like the most sound long-term idea.
Yes, as progressives rightly point out, the gas tax is regressive and affects the poorest Americans the most harshly. But there’s already enough of a mania for slashing taxes when politically convenient regardless of the long-term effect. With gas prices likely to remain elevated until next year at the soonest without a sudden change of heart from Iran to open the Strait of Hormuz, a pause in the gas tax could easily become permanent. By treating only the symptom, the disease itself would be allowed to fester, leaving gas prices painfully high and letting politicians off the hook.
Trump is busying himself with everything except affordability ahead of the midterms
Addicted to feeding red meat to the base, Trump is ignoring the one issue that matters most.
President Donald Trump demonstrated a show of electoral force last week that gave off the appearance that he still has the juice. In Indiana’s widely watched Republican primary on Tuesday, Trump’s quest for revenge against seven incumbent state senators who dared resist his edict to gerrymander the state’s electoral maps overwhelmingly succeeded. Some Republican pollsters have said Trump’s ability to decisively oust Republicans who cross him indicates that, despite his recent breaks from some MAGA influencers, he still has a lock on his electoral base.
But looking ahead to November’s midterm elections, Trump’s performance in Indiana is hardly reason for Republican optimism. He still holds tremendous influence over his own party, no doubt. But that seems to be his sole focus these days, as he busies himself with positions designed to allay right-wing activists in policy areas, such as immigration, and provide red meat for the base in ways that are likely to cost the party soft supporters. Meanwhile, he is perpetually ignoring the one thing that could save the GOP in November: delivering on affordability.
Last week the Trump administration turned the dial up on its aggressive deportation agenda. At the Border Security Expo in Phoenix on Tuesday, White House border czar Tom Homan said, “For the people out there saying ‘President Trump’s getting weak on mass deportation,’ you don’t know what the hell you’re talking about.” He added, “You ain’t seen s**t yet … mass deportations are coming.” And Homeland Security Secretary Markwayne Mullin assured Newsmax viewers on Tuesday that the administration is “still on track” to hit aggressive deportation quotas. “We just are doing it in a different way by using local law enforcement to work with us,” he pointed out.
In recent months, Trump has been forced to realize he has to choose between immigration hawks — who are upset over his retreat from a maximalist posture following federal immigration agents killing Renee Good and Alex Pretti in Minneapolis this winter — and less hawkish Republicans and independents who think he has gone too far in enforcement. After a somewhat more restrained approach for a few months on immigration enforcement, Mullin and Homan’s rhetoric suggests Trump is choosing the immigration hawks. That’s the kind of maneuvering that could set Trump up for worse press in the coming months, and could hurt him with voters outside his diehard base.
Trump was reportedly expected to meet with anti-abortion activists at the White House on Friday, after reports came out that advocates in the movement were upset he has not done more to crack down on access to abortion medications. Historically, Trump has seemed to understand he risks eliciting mass backlash by pandering too much to hard-line anti-abortion activists. But his reported desire to engage with them likely will be read by reproductive rights proponents that even more extreme restrictions on abortion rights could be on the way. Trump, for his part, seems willing to take the gamble.
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Even the way Trump is handling Iran suggests his audience is far narrower than the general electorate. His comically short-lived and ineffectual “Project Freedom” operation last week was the product of a desperate search for good news to sell the base. Trump’s plan made little sense as a “humanitarian” operation to guide boats out of the Strait of Hormuz, since Iran threatened to attack boats passing through the waterway without its permission. But it did make sense as a (short-term, optics-centric) attempt to pressure Iran by controlling some portion of the strait — clearly at the risk of unraveling the already fragile ceasefire. After Iran attacked a U.S. boat-guiding attempt, Trump backed down, fortunately. But the whole episode captured how much Trump was thinking about a way to sell a micro-victory at home instead of staying focused on the critical issue of ending the war and working to end an economic crisis — and bring down gas prices that are hurting all voters.
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Indeed, the economy appears to be far from Trump’s mind and policy agenda. The GOP’s affordable housing legislation is gathering moss in Congress. And Bloomberg reported, “Two executive orders, one aimed at easing access to mortgage credit and another that seeks to streamline regulations for builders, are not yet fully implemented and experts say they would only help marginally.” Meanwhile, Trump remains fixated on a potentially $1 billion ballroom project renovation and rarely carries out messaging on the handful of nominally affordability-focused policies he has passed.
It’s strange watching Trump clobber his own party so thoroughly. Even as his approval ratings plummet and consumer sentiment craters, he remains unable to focus on the cost-of-living grievances that have defined American politics for years now. Instead, out of habit (and maybe out of a desire for reliable affirmation), he goes back to the well of feeding his base instead of taking a broader perspective on Americans. The one thing Trump has going for him going into the midterms at this rate is the Democrats remain deeply unpopular. But Trump is making the lesser of two evils calculation easy for most voters.
