If Congress complies with President Joe Biden’s request and suspends the federal gas tax, will that result in a large reduction in gas and diesel prices? No.
If Congress voted in favor of suspending the federal tax, and so far, it seems unlikely, oil companies have no obligation to keep their prices stagnant. And states also levy taxes on gasoline, even though 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 rise in gasoline and diesel prices.
Is the suspension of the federal gas tax likely?
Both Democrats and Republicans seem to feel that a suspension of the federal gas tax, called the Festa, is neither likely nor beneficial. Even Rep. Peter DeFazio, a Democrat who heads the House Transportation and Infrastructure Committee, did not support Biden’s request.
DeFazio described Biden’s tweeted request as a “short-sighted proposal” that would be based on “the cooperation of oil companies to pass on tiny savings to consumers.” He added that a suspension of the federal gas tax “would make a multimillion-dollar hole” in future funding for infrastructure projects.
What is the federal gas tax
The federal gas tax is a surcharge that taxes gas and diesel prices. Currently, federal gas tax rates are 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel.
Fuel taxation does not end here. States also charge a tax, with money earmarked for infrastructure projects. The average state fuel tax is 31 cents.
In other words, on average, the total taxation to combine federal and state taxes is 49 cents for gas and 55 cents for diesel.
Which states have the highest fuel tax?
These are the top ten, with the gas tax rate appearing first, followed by the diesel tax rate. Two states, California and Indiana, have increased their state gasoline tax over the past two weeks. Remember that to these totals would be added the federal rates of 18.4 and 24.4.
- 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
Has any state suspended the gas tax?
Yes. Maryland was the first, with a suspension that began on March 18 and ended on April 16. Florida has pledged to suspend gasoline tax for a month, beginning Oct. 1.
Three states have suspended the gas tax for several periods of time:
- New York: June 1-December 31.
- Georgia: March 18 to July 14.
- Connecticut: April 1 to November 30.
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