Trump Proposes Pause on Federal Gas Tax

President Trump on Monday announced plans to temporarily suspend the federal gas tax as prices continue to rise amid the Iranian war.

The Details: A pause on the federal gas tax would require Congressional approval. Following the announcement, Sen. Josh Hawley (R-MO) and Rep. Anna Paulina Luna (R-FL) both said they'd introduce bills to suspend the federal gas tax. The US Energy Information Administration showed the current federal gas tax was 18.4 cents per gallon of gas and 24.4 cents per gallon for diesel. This was compared to a state tax of 32.6 cents per gallon of gas and 34.8 cents per gallon of diesel. 

Potential Impacts: According to NewsNation (Center), a pause on the federal gas tax would save drivers about $3 on a 16-gallon tank and $4.50 for SUVs with larger tanks, assuming the entire tax suspension was passed down to consumers. The Committee for a Responsible Federal Budget estimated a temporary pause on this tax would cost "billions each month" and lower total household spending only by 0.2%. About 91% of the federal gas tax goes to the Highway Trust Fund.

For Context: CBS (Lean Left) reported that gas prices have increased 50% since the Iranian war began on Feb. 28. On May 12, the national average price was $4.52, according to AAA. In 2022, former President Biden also proposed a gas tax holiday during the COVID-19 pandemic. 

How the Media Covered It: Outlets across the political spectrum noted a pause offers minimal consumer relief while costing the government more in revenue loss. Politico (Lean Left) highlighted Republican skepticism on the idea, writing, it "underscores Republican leaders' hesitance to directly confront the Iran war's impacts." Washington Examiner (Lean Right) also noted Republican split on the idea. Fox Business (Lean Right) interviewed the director of the National Economic Council who said that had Congress modernized the gas tax last summer like Trump wanted,"we'd be in much better shape" now.

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