The Liberty Daily 
(The Epoch Times)—President Donald Trump says he supports suspending the federal gas tax to help alleviate the pain at the pump as motorists contend with higher prices.
As of May 15, the national average price for regular gasoline is $4.53 a gallon, according to the American Automobile Association. This is up by about 50 percent since the start of the war in Iran.
The Iranian conflict has rocked global energy markets following the closure of the Strait of Hormuz.
With crude oil at above $100 per barrel, drivers could see higher pump prices for a while.
Proponents say temporarily halting fuel taxes could offer modest relief for Americans. Critics warn it could exacerbate Washington’s fiscal pressures.
Here’s what to know about the proposed gas tax suspension and what could come next.
What the White House Says
In a May 11 interview with CBS News, Trump said suspending the federal gas tax would be “a great idea.”
“We’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in,” the president said.
Later in the day, he acknowledged to reporters at the Oval Office that while it is a small amount, “it’s still money.”
Energy Secretary Chris Wright, in an interview with NBC’s “Meet the Press” on May 10, said halting the gas tax could be among several measures the administration could take to lower pump prices and reduce costs for the American people.
If implemented, Trump would be the first president to successfully suspend the federal gas tax.
Inside the Gas Tax
The federal gas tax was first instituted in 1932. While it was initially used as a temporary deficit-reduction tool during the Great Depression, it became a dedicated transportation funding measure in 1956. Today, it is allocated mainly to the Highway Trust Fund for the construction and maintenance of roadways.
The current federal excise tax on motor fuels is 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel.
In addition, a 0.1‑cent‑per‑gallon levy is applied to all motor fuel sold in the United States to support the Leaking Underground Storage Tank (LUST) Trust Fund. This tax finances federal and state efforts to detect, prevent, and remediate petroleum leaks from underground storage tanks.
Dollars and Cents
Economic observers have presented various estimates of the cost to the federal government of a gas tax suspension in terms of lost revenue.
The Committee for a Responsible Federal Budget, an independent policy organization, projects that a one-month gas tax suspension would cost $3.5 billion. A six-month suspension would cost $10.5 billion, and a one-year halt would cost $42 billion.
“Such a holiday could advance the insolvency of the Highway Trust Fund by two weeks to 17 months, to as soon as March of 2027,” the group said. “And any savings to the consumer would be partially offset by increases to gasoline and other prices.”
Last month, the Bipartisan Policy Center forecast that a five-month gas tax suspension, or holiday, would reduce gross revenues by approximately $17 billion, or 46 percent of total projected fiscal year 2026 gas and diesel tax revenue for the Highway Trust Fund.
At the same time, a suspended gas tax could bolster income and payroll tax revenue because of higher incomes. As a result, a five-month suspension would raise federal deficits by about $12 billion.
Adam Michel, director of tax policy studies at the Cato Institute, suggests this could be an opportunity to fully repeal the levy.
“Rather than a temporary holiday, Congress should use this moment to eliminate the federal gas tax entirely and devolve highway funding to the states,” Michel said in a May 11 report.
Congress Divided
Suspending the federal gas tax would require an act of Congress. So far, on Capitol Hill, members of both sides of the aisle have expressed mixed views on Trump’s idea.
Sen. Josh Hawley (R-Mo.) on May 11 introduced legislation named the Gas Tax Suspension Act. The bill would suspend the federal tax on gas and diesel for 90 days after enactment. It would also allow the president to extend the suspension for an extra 90 days “if he determines that economic conditions merit an extension.”
This comes two months after Sens. Richard Blumenthal (D-Conn.) and Mark Kelly (D-Ariz.) submitted the Gas Prices Relief Act, which would have suspended the federal gas tax through Oct. 1.
Sens. Rand Paul (R-Ky.) and Rick Scott (R-Fla.) are wary of a gas tax holiday, citing the potential price tag.
Paul said that if the federal government halts the gas tax, there needs to be a discussion about also interrupting construction projects.
“If you want to suspend $20 billion in taxes, suspend $20 billion in work, but nobody will be for that,” Paul told reporters.
“I think instead of suspending the tax, we should suspend the war.”
Scott, speaking to reporters, said that while he wants to cut every tax he can, he would “like to balance the budget, too.”
Sen. Jack Reed (D-R.I.) suggested restricting gas exports instead to help bring down prices.
“I think the first step that [we] would take is [to] limit the export of petroleum products so that gas prices will be able to come down,” he told The Epoch Times.
This, he said, will not add further pressure to the budget deficit.
Relief at the State Level
To date, three states have taken action on gas taxes.
In March, Georgia fully suspended its motor-fuel excise tax of 31.2 cents per gallon until May 19.
The average price for gas in the Peach State is $4.016 a gallon.
Indiana extended its suspension of the 17.2-cent-a-gallon levy for an additional 30 days through June 7.
Indiana Gov. Mike Braun also urged gasoline stations to deliver gas tax relief directly to consumers, adding that authorities will be patrolling the pumps to ensure savings are given to motorists and that they are not price-gouging.
“This will take the gas holiday to the end of my emergency declaration. This is the longest I can suspend the gas tax under my authority,” Braun said at a May 6 news conference.
Indiana’s average price for a gallon of gasoline is $4.209, according to AAA.
Utah approved a 6-cent-a-gallon reduction in its state gas tax—equal to a 15 percent cut—effective from July 1 to Dec. 31.
Drivers pay an average of $4.607 per gallon in Utah, according to AAA.
Research suggests that previous state efforts to enact gas tax holidays, such as in 2022, have generally benefited consumers.
A 2022 analysis by the Penn Wharton Budget Model found that most of the tax savings were ultimately passed through to motorists in the form of lower pump prices. In Maryland, for example, an estimated 72 percent of the suspended tax was reflected in reduced consumer prices.
But the paper noted that “these price reductions were often not sustained during the entire holiday.”
Nathan Worcester contributed to this report.
