Suspending The National Gas Tax Is Not The Right Answer [OPINION]
It's impossible not to feel the price pinch at the gas pump these days. No matter what size of vehicle you drive it is exponentially more expensive to fill up your gas tank. And while the national average for a gallon has briefly fallen back below $5, prices are expected to spike again as we head towards the 4th of July holiday. We all want solutions, and one that is being paraded around lately is the suspension of the national tax on gasoline.
President Biden has called on Congress to suspend the national gas tax for three months. CBS News reports that it would trim off around 18 cents per gallon of gasoline and around 24 cents per gallon of diesel. Many hope that if Congress passes such a measure that states would follow suit. In Iowa, the state taxes gasoline at a rate of between 24 and 30 cents per gallon. But states are in no way shape or form required to do so, even if Congress acts. So is saving 18 cents a gallon right now really worth it?
According to CBS News, many experts fear that even a slight reduction in the price of gas could further boost consumer demands, and lead to higher prices in the future. Plus, by the time the tax is stopped and the savings are passed on to the consumer, the price of crude oil could go up, negating any savings you were expecting to see. CBS News says that knocking off 18 cents per gallon of gas is like taking $7 off per barrel of oil. Crude prices can fluctuate that much in a single day.
And for those who support cutting the tax because you believe saving something is better than nothing, I hear you. But take this into consideration. CBS News reports that the Congressional Research Service estimates that if the federal gas tax holiday had been in place in 2020, a typical family would have saved $163 in a year. That's just over $13 saved a month.
The bottom line is that there are many factors that could end up eating any savings that Congress attempts to pass on to us this summer. Stop the short-term, quick-fix schemes and give Americans real solutions to lowering commodity prices. Because $13 a month isn't going to save anyone.