U.S. Senate Considers Suspending Federal Gas Tax, But Critics Are Wary

Photo Credit: Mark Buckawicki / CC

The Center Square [By Casey Harper] –

A new push to suspend the federal gas tax has gained momentum amid soaring inflation, but critics on both sides of the aisle call it a temporary solution that will not solve the larger problem.

The move comes as gas prices have skyrocketed in the past year along with a range of other goods and services hit hard by inflation. The current federal gas tax is about 18 cents per gallon and is used for highway funding.

“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,“ said Sen. Mark Kelly, D-Ariz, who is helping lead the effort.  “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.”

Critics say the push is a politically motivated, a short-term reprieve to carry through the midterm elections. They also say it will be hard to ensure that lifting the tax will actually lead to reduced prices for consumers.

“After canceling pipelines, banning drilling on federal lands, and declaring war on energy companies, Democrats suddenly want to repeal the gas tax,” U.S. Sen. Tom Cotton, R-Ark., wrote on Twitter. “Why? Because an election is coming.

“The Democratic Senators facing election want a *temporary* gas tax holiday,” he added. “When does it end? Right after the election. Very subtle, [Sen. Mark Kelly]!”

Larry Behrens, communications director for Power the Future, a group that advocates for energy sector workers, said it’s President Joe Biden’s policies that caused gas prices to skyrocket.

“It’s pathetic that Joe Biden only worries about his skyrocketing gas prices when he feels there may be political consequences,” Behrens told The Center Square. “For nearly a year our families have struggled under oppressive energy prices and all Biden could do was surrender American energy independence and beg foreign producers for more oil. If Biden is really worried about the tax on energy, the first tax he should eliminate is the green tax on our country that led to these prices and 40-year high inflation.”

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AAA puts the current average price of gas nationwide at $3.51 per gallon, up a full dollar from the same time last year.

Overall, energy prices have increased significantly. Earlier this month, the Bureau of Labor Statistics released its Consumer Price Index (CPI) data, a key marker of inflation. BLS reported that in January prices rose a 0.6%, with energy costs leading the way.

“The all items index rose 7.5 percent for the 12 months ending January, the largest 12-month increase since the period ending February 1982,” BLS said. “The all items less food and energy index rose 6.0 percent, the largest 12-month change since the period ending August 1982. The energy index rose 27.0 percent over the last year, and the food index increased 7.0 percent.”

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Critics say the proposed tax suspension is only a temporary solution that will make the overall problem worse.

“But new tax cuts aren’t going to stop this inflation; after all, excessive tax cuts and spending are part of what caused high inflation,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “While a gas tax holiday might provide some temporary relief, much of the benefit may flow through to oil producers or lead to higher prices in other sectors of the economy. By boosting demand in an already over-stimulated economy, the holiday would likely boost inflation in 2023 once it ends.”

MacGuineas also argues the tax cut does not adequately account for how those funds have already been allocated.

“Meanwhile, the federal government would be out $20 billion this year alone – and much more if the holiday were extended,” MacGuineas added. “The Highway Trust Fund is just five years from insolvency, and the last thing we need is to cut its primary revenue source or paper over shortfalls with yet another general revenue transfer.”

About the Author: Casey Harper, The Center Square D.C. Bureau Reporter – charper@centersquare.com ~ Harper is a Senior Reporter for the Washington, D.C. Bureau. He previously worked for The Daily Caller, The Hill, and Sinclair Broadcast Group. A graduate of Hillsdale College, Casey’s work has also appeared in Fox News, Fox Business, and USA Today.

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