The Patriot Post® · Gas Taxes and Bloating Prices

When President Donald Trump first launched Operation Epic Fury against Iranian targets back in February, daily news headlines reminded us of the complex military and political game of chess taking place around the Strait of Hormuz. But for the most part, life here at home went on as usual. That’s all changed in recent weeks as the war’s ramifications have begun to affect the day-to-day lives of American citizens.

The sharpest pains come from gas prices. A $1.50 per-gallon increase in the national average can add up to hundreds of dollars per month at a time when it’s already hard for some families to pay their bills or put food on the table.

With the war in Iran seemingly at a standstill, President Trump is floating suspending the federal tax of 18 cents per gallon to give Americans a break. That would require approval from Congress.

Missouri Senator Josh Hawley took the first step forward, introducing legislation that would “pause both the 18.4 cent gas tax and the 24.4 cent diesel tax for 90 days upon passage,” reports Fox Business. “The bill would also allow Trump to extend the suspension for an additional 90 days if he determines it is necessary.”

Of course, when Joe Biden pitched suspending the gas tax in 2022, Hawley called it “one of the dumbest things I’ve ever heard of.”

Why? Well, the same thing is true now that was true then: Pausing gas taxes would be broadly popular, but the impact might not be enough to make a difference.

NBC News explains, “While a suspension would offer some relief, an NBC News analysis shows that gas prices would still average 35% more per gallon than they were at the start of the Iran war, even if all state and federal taxes were suspended. Average gas prices nationwide are up more than 50% since the war was launched at the end of February.”

Most Americans would be glad to see the president and Congress take this step. There are, however, some who don’t think it’s a good idea.

“The federal gas tax primarily funds the Highway Trust Fund, money from which is used on federal highway construction, maintenance, public transit, and infrastructure projects,” reports CNBC. “That money is vital to certain industries, including trucking and construction, that either rely on federal roads or are contracted to complete infrastructure projects.”

The Wall Street Journal editorial board adds, “A temporary pause on the federal gas tax won’t appreciably reduce how much Americans pay at the pump. After the tax holiday ends, prices will increase. A suspension would cost the highway trust fund about $2.1 billion a month in revenue, which would have to be made up with general fund revenue.”

In any case, paying more at the pump affects not only the average American driver heading into work or going on a summer vacation but also leads to higher prices for food and other products.

For example, the Bureau of Labor Statistics recently reported that the consumer price index rose to 3.8% annually in April. The Bureau notes that since last April, gasoline prices have increased by 28.4%, fuel oil prices by 53.4%, and food-at-home prices by 2.6%.

But the conflict in the Strait of Hormuz, despite what many Democrat leaders say, is not the only reason Americans are seeing gas prices soar.

In addition to suspending the federal gas tax, “removing, reforming, or temporarily suspending red tape and taxes that stem from Democrat-led states’ onerous environmental policies would increase domestic supply and reduce compliance costs, exerting downward pressure on prices,” writes Andrew Follett at National Review.

Follett also sees potential relief by implementing other measures, including removing barriers to domestic energy production, sidelining Obama-era sulfur standards that added 10 cents per gallon to gas prices, extending Biden-era flexibility on methane regulations, and granting the Environmental Protection Agency authority to grant small refinery exemptions from ethanol requirements.

All these steps might work, but it would take time. Months could pass before Republicans and Democrats reach an agreement, something that will be even more challenging with the upcoming midterms. In the short term, states could cut their own gas taxes to have a more immediate impact on consumers.

Georgia, Indiana, and Utah have already done it, with other states considering the same. Since state gas taxes are often much higher than the 18-cent federal tax, this could bring more immediate relief to American drivers. For example, Indiana’s drivers are now paying 60 cents less per gallon.

The issue of high gas prices is more complex than we realize, and the war in Iran is just part of it. Getting oil from the ground into the gas tank is a lengthy, costly process with many steps. Suspending gas taxes at the state and federal levels isn’t a viable long-term solution, so lawmakers need to get serious about maximizing domestic energy production (e.g., building new refineries) while reducing our dependence on countries in volatile regions of the world.