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Suspending the federal gas tax, as President Joe Biden called on Congress to do last week, is a monumentally bad idea.
Gas prices are at historically high levels, and that is hurting many Americans, especially those who have long commutes to work.
But, suspending the gas tax won’t necessarily lower those prices and it could leave a widening hole in the funding needed to maintain our roads and other transportation infrastructure.
Congress should reject this proposal, as should governors, whom Biden pushed to suspend their state fuel taxes as well.
On Wednesday, the president urged Congress to suspend federal fuel taxes, which are 18.4 cents per gallon for gasoline and 24.4 cents a gallon on diesel fuel, for 90 days. Suspending the federal gas tax for three months would save the average Maine driver $28, according to the Maine Department of Transportation.
“I fully understand that a gas tax holiday alone is not going to fix the problem,” Biden said in a speech on Wednesday. “But it will provide families some immediate relief, just a little bit of breathing room as we continue working to bring down prices for the long haul.”
That “little bit of breathing room” could come at a steep price. For one, there is no guarantee that oil and gas companies, which have made record profits in recent months, would pass along the savings to consumers.
Second, refinery capacity remains constrained worldwide. Suspending the gas tax wouldn’t bring more refining capacity online, which is needed to increase the supply for gasoline and diesel fuel.
Third, the gas tax is a significant source of transportation funding. Even a short-term reduction in that funding could have negative consequences for our infrastructure, which is already underfunded.
And, if the gas tax is suspended, there is little doubt that some lawmakers will object to reinstating it, calling that a tax increase. That would have long-term terrible consequences for maintaining and improving our roads, bridges, railways and other transportation infrastructure.
Sen. Angus King said Thursday that he “commended [Joe Biden] for taking a bold step,” but that he was concerned because the funding was needed to fix our roads.
“We can’t wish away our potholes,” he said during a virtual press conference with Maine media.
Sen. Susan Collins called the proposal a gimmick and questioned its timing about three months before the November election.
“Instead of proposing gimmicks that don’t meaningfully lower the prices Americans are paying to fill their gas and heating oil tanks, the Biden Administration should focus on working with American energy producers to responsibly increase oil and gas production here at home and support producers in Maine and elsewhere who are developing renewable fuels,” she said in a statement.
Rep. Chellie Pingree said that instead of suspending the gas tax, Congress should address what she called “price gouging” by large oil companies.
Rep. Jared Golden was the only member of the state’s congressional delegation to support the move. But, he stressed, such a move should come along with measures to increase production in the U.S.
Gov. Janet Mills said she opposes suspending the state’s fuel taxes, which are 31 cents per gallon of gasoline and 31 cents a gallon for diesel. Doing so at the state level would save the average driver $45 over three months, but would eliminate more than $57 million from the state’s Highway Fund. Local road funding would also be reduced as would funding for the Secretary of State’s Office and to the Department of Public Safety, which also receive funds from the gas tax.
Fortunately, Biden’s gas tax holiday appears to have little support in Congress. This is an idea that should remain parked at the starting line.
