As gas prices continue to soar nationwide, President Donald Trump wants to suspend the federal gas tax, but that proposal isn’t a quick fix.
Trump made comments at the White House Monday that he wants to suspend the $0.18-per-gallon federal tax on fuel purchases, a move that could only be achieved via an act of Congress.
Still, Trump said the idea appealed to him, and he’s pushing lawmakers to make it happen.
“We’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in,” he said in an interview with Breaking News News.
Gas prices have surged 50% since the president launched strikes on Iran, leading to significant disruptions in fuel transport through the Strait of Hormuz. The national average for a gallon of gasoline currently sits at $4.52 per gallon, while prices are approaching $5 a gallon in some states, including in Illinois.
Even as Trump proposes suspending the fuel tax, members of Congress have also been putting forward legislation to do so, including Missouri Sen. Josh Hawley and Arizona Sen. Mark Kelly, among others.
The suspension of the fuel tax would likely save Americans between 10-to-15 cents-per-gallon on gasoline according to some estimates, but it would also lead to some significant financial challenges for the federal government.
The Bipartisan Policy Center estimates a five-month suspension of the gas tax would cost the federal government up to $17 billion, all of which would normally go toward road and bridge repair, along with transit funding.
Some states, including Georgia, have already suspended their state fuel taxes, and the state of Indiana has followed suit. The state had already suspended its gasoline usage tax of $0.23-per-gallon, but last week Gov. Mike Braun also suspended its $0.36-per-gallon excise tax on fuel.
Indiana Gov. Mike Braun announced a 30-day gas tax holiday extension and a suspension of the state’s excise tax to provide some relief for drivers, as Rose Schmidt reports.
The state of Indiana uses fuel taxes to help fund infrastructure improvements, but it’s unclear how much the tax suspension will end up costing the state.
Illinois meanwhile has not suspended its taxes on fuel, and is planning to raise them later this summer, as a 2019 law indexes the state’s fuel tax by the rate of inflation. Currently a gallon of gas in Illinois is taxed at 48.3 cents-per-gallon, and that number will go up to 49.6 cents-per-gallon on July 1.
Once federal, state and local taxes are combined, Illinois drivers pay around $0.85 per gallon in taxes, according to research estimates.
It’s unknown whether Illinois lawmakers will suspend the state’s fuel tax, and they would have until the end of May to make that determination.
