President Trump said he wants to temporarily suspend the 18-cent per gallon federal gas tax to help drivers suffering from high prices at the pump, and Republicans in Congress have introduced legislation that would do just that.
“I think it’s a great idea,” Trump said in a telephone interview with a CBS News reporter of the plan to temporarily lift the gas tax. “Yup, 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.”
The comments come as U.S. Senator Josh Hawley, a Republican from Missouri, said he is introducing legislation on Monday that would suspend the federal gas tax. Additionally, a pair of Democratic lawmakers in the U.S. Senate also introduced legislation on March 13 that called for the suspension of the federal gas tax until October 1 in light of the nation’s escalating gas prices.
“This legislation temporarily suspends the federal gas tax, lowering high gas prices squeezing consumers and bringing much needed financial relief to American families,” said Sen. Richard Blumenthal, a Democrat from Connecticut who co-authored the bill.
The largest lobbying group for carmakers in Washington, the Alliance for Automotive Innovation, also has recently come out in favor of a plan to eliminate the federal gas tax in favor of a new vehicle fee that would be based on the weight of cars.
The comments from the president and lawmakers came as the average price of gas reached $4.52 on May 11, according to the AAA Auto Club. That’s up from a national average gas price of $2.98 on Feb. 28, the day the U.S. first launched military strikes against Iran at Trump’s direction.
How Much Is the Federal Gas Tax?
The federal government has been collecting taxes on every gas purchase made at a U.S. station since the 1930s. The current rate of 18.4 cents per gallon was established by a law passed by Congress in 1993. Transportation funding advocates have lamented the fact that Congress has not moved to increase the gas tax in over three decades.
The gas tax is typically authorized by Congress each time it adopts a federal highway funding bill, because the revenue it generates is used to fund the U.S. Department of Transportation’s Highway Trust Fund. The Highway Trust Fund is distributed to states to help pay for road and transit construction projects.
The federal gas tax was first established in 1932 at a rate of 1 cent per gallon. Congress has approved increases multiple times since then, and some lawmakers have called to tie the tax to inflation as votes to increase taxes have become politically difficult for lawmakers who are up for election.
What Is Gas Tax Money Used For?
The U.S. Department of Transportation’s Highway Trust Fund, which is distributed to states to help pay for road and transit construction projects, is primarily funded by the federal gas tax of 18.4 cents per gallon on every U.S. gasoline purchase. As cars have become more fuel-efficient and more drivers have opted for EVs and hybrids, less money per mile driven has been collected despite increased use of roads. Lawmakers have been looking for ways to close that growing gap in federal gas-tax revenue.
The federal gas tax hasn’t been increased since 1993, and it brings in about $40 billion per year at its current level, according to the Tax Policy Center. The federal government typically spends about $60 billion on transportation projects, and infrastructure advocates say the amount is barely enough to maintain the nation’s roads and transit systems. Most states also levy their own gas taxes to fund local road projects.
Can Trump Unilaterally Suspend the Gas Tax?
A suspension or elimination of the federal gas tax would require an act of Congress since the collection of the levy was authorized by lawmakers in previous highway funding bills.
Trump and others have floated the idea recently because, in addition to voter frustration with high gas prices, the current federal highway funding measure was part of former President Joe Biden’s bipartisan infrastructure bill that is set to expire on Sept. 30.
The last time Congress took a vote to do anything other than reauthorize the gas tax at its current 18.4 cents-per-gallon level was 1993.
Since the tax was first implemented at a rate of 1 cent per gallon in 1932, Congress has voted to increase the fuel levy nine times, including the 1993 vote, according to the Congressional Research Service.
In that same time span, lawmakers have only voted twice to lower the federal gas tax, once going from 1.5 cents per gallon to 1 cent per gallon in 1934 and once going from 9.1 cents per gallon to 9 cents per gallon in 1987.
Congress has debated ideas about temporarily suspending the gas tax at times of high fuel prices or scrapping it altogether in favor of plans to tax drivers based on the number of miles they drive or their car’s weight. But lawmakers have never voted to rescind the tax since they first authorized it in 1932.
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