As financial pressures mount with inflation and gas prices reaching new highs, President Biden will ask Congress on Wednesday to suspend federal gas taxes for the next three months to ease costs.
Biden is also expected to urge states to suspend state gas taxes — since state levies are often higher than federal taxes. The Biden administration says the tax holiday is a way to offer more “breathing room” and lower costs in the long run.
What is the meaning of a gas tax holiday?
The gas tax holiday would suspend the tax of 18 cents per gallon of gas and 24 cents per diesel that consumers normally pay at the pump for three months. The federal gas taxes paid by drivers goes towards the Highway Trust Fund, which Biden has stated would not be negatively affected by the tax suspension as the deficit is at a low wherein the country can “afford” the tax holiday.
Related: Biden is Releasing 100 Million Barrels of Oil. Will This Actually Have Any Effect on Gas Prices?
What about state gas taxes?
Biden is urging states to also suspend state gas taxes. Connecticut and New York have already temporarily suspended gas taxes, while Illinois and Colorado have delayed previously planned tax and fee increases. “The President believes more states and local governments should do so,” the White House said in a statement.
When will gas prices go down?
Earlier this week, prices dropped for the first time since April, falling to an average of $4.98. According to GasBuddy analyst Patrick De Haan, average prices could fall below $4.90 next week. The shift comes in part from the Fed’s move to raise interest rates by 0.75 percent along with U.S. oil production reaching its highest level in two years.
Related: Hitting the Road for Summer Travel? Sticker Shock at the Pump Is Going to Burn: What to Expect
Formerly Enslaved Black Man Nearest Green Taught Jack Daniel Everything He Knew About Whiskey. Today, the Founder of Uncle Nearest Premium Whiskey Celebrates His Legacy.
Leadership Lessons From the Exclusive Creativity School That ‘Packs 5 Years Learning Into 5 Days’
3 Expert-Backed Strategies for Staying Calm in Times of Confrontation
The CEO of Wayfair Has Helped Revolutionize Digital Shopping for 20 Years. Here’s How He Handles Rocky Economic Conditions.
This Founder Went to Prison When He Was 15 Years Old. That’s Where He Came Up With the Idea for a Company Now Backed By John Legend.
3 Signs You’re Letting Pride Get in the Way of Being Successful
Chip and Joanna Gaines and Shonda Rhimes Found Incredible Success By Using This One Entrepreneurial Strategy. Here’s How You Can Too.