ALEXANDRIA, Va.—U.S. President Joe Biden is deciding whether to idle the federal gasoline tax temporarily to help give Americans relief at the pumps, reports USA Today. Biden should have a decision “by the end of this week,” he told reporters.
Consumers pay 18.4 cents per gallon in federal tax, and the funds go toward road improvements. That’s beside state taxes on fuel.
“We just did a big infrastructure bill to help fund the roads," Energy Secretary Jennifer Granholm said on CNN's "State of the Union." "If we remove the gas tax, that takes away the funding that was just passed by Congress to be able to do that.”
Treasury Secretary Janet Yellen said on ABC's "This Week" that it's "an idea that’s certainly worth considering."
Biden said he spoke with Larry Summers, Treasury secretary in the Clinton Administration and economic adviser in the Obama Administration, who said that a recession may be inevitable and was critical of a federal gas tax relief.
"I'm no fan of the gas tax holiday. I think that`s kind of a gimmick, and eventually you have to reverse it," said Larry Summers on NBC's "Meet the Press."
However, Biden insisted that there is “nothing inevitable about a recession.”
The current national average price for a gallon of gasoline is $4.97, which is down five cents from a week ago, up 38 cents from a month ago and up $1.90 from a year ago.
In 2021, the convenience and fuel retailing industry paid or collected $159 billion in taxes, or 23% of all sales dollars, according to newly released NACS State of the Industry data.
The goal of gas tax relief is to reduce costs for consumers, an intended result that convenience stores naturally support. When customers spend less money on gas, they are more likely to spend more money elsewhere, including inside the store. But it gets much more complicated, and sometimes, relief at the pump isn’t seen immediately after a gas tax holiday is enacted. Here are three significant complications that relate to how immediately tax relief translates to the price at the pump.
Also, how much control do U.S. presidents have over gas prices? In reality, they have little say in the price at the pump. Here’s why.