If Congress abides by President Joe Biden’s request and suspends the Federal gas tax, will that translate into greatly reduced gas and diesel prices? No.
If Congress did vote to suspend the Federal tax – and to date, that seems unlikely – the oil companies are under no obligation to keep their prices stagnant. And states also charge gas taxes, although a handful of them have suspended them.
Biden Tells Congress to Suspend Federal Gas Tax
Biden tweeted the request to Congress this week, citing Putin’s invasion of Ukraine as the reason for the average $2 per gallon increase in gas and diesel prices.
Is the Federal Gas Tax Suspension Likely?
Both Democrats and Republicans seem to feel that a Federal gas tax suspension, being called a Holiday, is not likely or beneficial. Even Representative Peter DeFazio, a Democrat who heads the House Transportation and Infrastructure Committee, didn’t get behind Biden’s request.
DeFazio called Biden’s tweeted request a “shortsighted proposal” that would rely on “the cooperation of oil companies to pass on minuscule savings to consumers.” He added that a Federal gas tax suspension would “blow a multibillion-dollar hole” in future funding for infrastructure projects.
What Is the Federal Gas Tax
The Federal gas tax is a surcharge levied on the prices of gas and diesel. Currently the Federal gas tax rates are 18.4 cents per gallon for gasoline and 24.4 cents per gallon on diesel.
Fuel taxation doesn’t end there. States also charge a tax, with the monies earmarked for infrastructure projects. The average state fuel tax is 31 cents.
In other words, on average, the total taxation on combining Federal and state taxes is 49 cents for gas and 55 cents for diesel.
Which States Have the Highest Fuel Tax?
Here are the top ten, with the tax rate for gas listed first, followed by the tax rate for diesel. Two states, California and Indiana, hiked their state gas tax within the last two weeks. Remember that the Federal rates of 18.4 and 24.4 would be added to these totals.
- California 70.95 and 102.11
- Illinois 59.6 and 67.02
- Pennsylvania 58.7 and 75.2
- Hawaii 51.69 and 52.41
- Indiana 50.79 and 56.00
- Nevada 50.48 and 28.56
- Washington 49.4 and 49.4
- New York 48.22 and 46.98
- Michigan 45.17 and 47.16
- Florida 43.55 and 36.37
Have Any States Suspended the Gas Tax?
Yes. Maryland was the first, with a suspension that started March 18 and ended April 16. Florida has committed to suspending the gas tax for one month, beginning October 1.
Three states have suspended the gas tax for various periods of time:
- New York: from June 1 through December 31.
- Georgia: from March 18 through July 14.
- Connecticut: from April 1 through November 30.
Image: Depositphotos
This article, "Biden Tells Congress to Suspend Federal Gas Tax" was first published on Small Business Trends
via https://www.aiupnow.com
Lisa Price, Khareem Sudlow
