Biden is also expected to urge states to suspend state gas taxes — since state levies are often higher than federal taxes. The Biden administration says the tax holiday is a way to offer more “breathing room” and lower costs in the long run.
What is the meaning of a gas tax holiday?
The gas tax holiday would suspend the tax of 18 cents per gallon of gas and 24 cents per diesel that consumers normally pay at the pump for three months. The federal gas taxes paid by drivers goes towards the Highway Trust Fund, which Biden has stated would not be negatively affected by the tax suspension as the deficit is at a low wherein the country can “afford” the tax holiday.
What about state gas taxes?
Biden is urging states to also suspend state gas taxes. Connecticut and New York have already temporarily suspended gas taxes, while Illinois and Colorado have delayed previously planned tax and fee increases. “The President believes more states and local governments should do so,” the White House said in a statement.
When will gas prices go down?
Earlier this week, prices dropped for the first time since April, falling to an average of $4.98. According to GasBuddy analyst Patrick De Haan, average prices could fall below $4.90 next week. The shift comes in part from the Fed’s move to raise interest rates by 0.75 percent along with U.S. oil production reaching its highest level in two years.