Trump Proposes Federal Gas Tax Suspension to Combat Rising Energy Prices
President Trump proposed suspending the federal gas tax to help lower fuel prices that have surged due to the Iran war. However, the suspension would require Congressional action, a step lawmakers have resisted during previous periods of high gas prices.
The Proposal
President Donald Trump said Monday that he wants to suspend the federal gas tax, in an effort to bring down gas prices that would require action from Congress. In an interview with CBS News, Trump pushed for halting the taxes for an indefinite period, with plans to phase them back in when prices jolted by the war with Iran go back down. "We're going to take off the gas tax for a period of time, and when gas goes down, we'll let it phase back in," he said.
The Challenge
The federal gas tax imposes an 18.4 cent-per-gallon levy on gas and 24.4 cents per gallon of diesel. But suspending those excise taxes would require an act of Congress — a step that lawmakers have declined to take in prior periods of elevated gas prices.
Limited Impact
As national gas price averages head toward $5 per gallon, one state has already suspended its gas tax, and now President Donald Trump and his Cabinet are talking about doing the same. While a suspension would offer some relief, an NBC News analysis shows that gas prices would still average 35% more per gallon than they were at the start of the Iran war, even if all state and federal taxes were suspended.
Price Crisis
The surge in gasoline prices — from $2.98 a gallon when the war started to $4.52 on Monday — is costing American consumers $20 billion.