Biden gives a summer gas tax holiday, as he makes $ 5 per gallon
WASHINGTON – President Joe Biden called on Congress and state legislatures on Wednesday to grant a temporary break from gas taxes – but opposed by his own party members and Republicans, which seems unlikely at the federal level.
Additionally, many state legislatures have been out of session for years and are not expected to return to their capitals until January.
Nevertheless, Biden said the decision would help alleviate the tight budgets many families face as prices rise, urging federal and state lawmakers to give them a 90-day break from gas taxes.
He asked petroleum companies to increase the number of refineries that produce gas for vehicles. He said companies should transfer petrol to consumers at a lower rate of petrol per barrel and save from any gas tax holiday rather than keeping it to themselves.
Referring to the federal gasoline tax, Biden said, “I call on companies to transfer every penny of this 18-cent cut to consumers.” “There is no time now for profit.”
If all four things have to happen – companies that pass federal gas tax holidays, state breaks, increased processing and low-cost gasoline – prices can drop by as much as $ 1 per gallon, he said.
Democrats slam the gas tax break
However, members of their own party do not seem to be on board.
Peter DeFazio, chairman of the US House Transportation and Infrastructure Committee, an Oregon Democrat, rejected Biden’s idea of a gas tax holiday before his afternoon address.
“Despite its intent, this policy only achieves a small solution when we blow a $ 10 billion dollar hole in the Highway Trust Fund.
“Moreover, encouraging state governments to suspend their gas taxes could weaken the impact of bipartisan infrastructure law by reducing the amount of money available to states to spend on infrastructure improvements,” DeFazio continued.
Need to stay in touch?
Is there a hint of news?
Speaker Nancy Pelosi, a California Democrat, said in a statement that she “sees the consensus in the House and Senate on the road ahead of the president’s proposal.”
Senate Majority Leader Chuck Schumer of the New York Democrat believes that “the most important thing we can do to reduce gas prices is to penetrate the oil market’s big oil manipulation.”
Jason Furman, chairman of the board of economic advisers during the Obama administration, said Tuesday that the gas tax holiday does not offer much relief to drivers.
“Whatever you think of the eligibility for a gas tax holiday in February, it’s a bad idea now,” he said Tweeted. “Refineries are now more restrictive so supply is completely unstable. Most of the 18.4 cents reduction is pocketed by industry – maybe a few cents shipped to customers.
Furman had previously predicted “two-thirds of the benefits would go to consumers,” he said this week, which was “probably overly generous at the time.”
“Despite this, there is still less. I expect consumers to get one-third of the benefits,” he wrote.
He added that a nationwide gas tax holiday could boost inflation, but not much “because most of it is windfall gains for the oil industry and is not particularly exciting. But it is still going in the wrong direction.”
Gasoline prices will continue to rise, according to the AAA
The nationwide average price for a gallon of gasoline dropped from about $ 3.30 in January this year to just under $ 5 in mid-June, According to this AAA.
Georgia ($ 4.46), Louisiana ($ 4.51), Tennessee ($ 4.58) and North Carolina ($ 4.60) are among the states with the lowest gasoline prices in the country, according to the AAA.
The US gas tax was last increased from 14.1 cents in 1993 to 18.4 cents per gallon. The nationwide tax on diesel is 24 cents a gallon.
Much of that money goes to the Highway Trust Fund, which receives 80% of its gas taxes, which is then used for road construction and other transportation infrastructure projects.
The US gas tax is unrelated to inflation, meaning it has lost more than 45% of its purchasing power in the last 30 years. According to this Peter G. Peterson Foundation.
The United States is not the only country facing high inflation and rising gas prices.
More than 90 countries have higher gasoline prices per gallon than the United States, including Hong Kong ($ 11.35), Israel ($ 8.71) and Canada ($ 6.55) Website It tracks global prices.
Jacob Fischler contributed to this report.
