President Biden called for a three-month suspension of federal gasoline and diesel taxes—a move that is unlikely to have the support needed to pass in Congress and one economists and business leaders say would do little to address record-high gas prices, reports the Wall Street Journal.
"I fully understand that the gas tax holiday alone is not going to fix the problem, but it will provide families some immediate relief," Mr. Biden said at the White House on Wednesday. "Just a little bit of breathing room."
Congress Unlikely to Heed Biden’s Call for Three-Month Suspension of Gas Tax (Wall Street Journal)
Excerpt from the Wall Street Journal: Mr. Biden and his advisers have been discussing the issue for months in the midst of increasing political pressure to take action on rising gas prices. A suspension of the 18.4-cents-a-gallon federal gasoline tax and 24.4-cents-a-gallon diesel tax through September would require congressional approval, so the decision by Mr. Biden to endorse the effort is largely symbolic and reflective of the limited options the president has in providing relief to consumers.
Gas prices in the U.S. are close to $5 a gallon, President Joe Biden’s approval rating is 36 percent, and the first phenomenon has a lot to do with the second, writes The Atlantic. But the factors that have driven gas prices higher are largely out of Biden’s control, at least in the near term. Given how upset Americans are about the price of gas, though, he wants to be seen doing something.
What a Gas-Tax Holiday Won’t Do (The Atlantic)
Excerpt from The Atlantic: Suspending the gas tax is essentially a political gimmick that’s bad on the economic merits and probably won’t yield much in the way of political benefit anyway, in part because everyone knows it’s a gimmick. (Nancy Pelosi called the idea "very showbiz" when it was floated earlier this year.) It’s not a disastrous proposal, because the federal gas tax is so small, relatively speaking, that suspending it isn’t going to make a huge difference either way. But it’s a proposal that will cause more problems than it’ll solve.
According to Yahoo! Finance, "The average adult in the U.S. uses about one gallon of gasoline per day," says Jay Zagorsky, senior lecturer in markets, public policy and law at Boston University. "If President Biden is able to push through a gas tax holiday, the typical adult will save a bit less than $6 a month. In a time when inflation is over 8%, an extra $6 will not make much difference."
Biden's gas tax holiday might save you $6 a month, fueling calls for inflation stimulus checks instead (Yahoo! Finance)
Excerpt from Yahoo! Finance: Patrick De Haan, head of petroleum analysis at GasBuddy, says there may be some psychological relief from the gas tax holiday — but agrees that the financial relief is small. De Haan says the price of gas is as high as it is due to greater demand and lower supply. Freezing the gas tax could increase consumer demand for gas, pushing the price even higher. De Haan suggests indirect relief would be the best approach and recommends sending out a $50 or $100 check that Americans don’t necessarily need to use toward gas. This could help alleviate inflationary pressures for everyone, not just motorists. "If they need it for gas, they'll be wise and save it. And that won’t maybe have as profound an impact on gasoline demand while still offering some sort of relief."
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