Summer travelers need a break from 18.4¢ federal gas tax | James Rosen

I’m not a knee-jerk, anti-tax fellow. While no one enjoys paying taxes, I recognize that federal, state and local levies fund a broad range of critical needs, including schools, parks, libraries, police, public health and scientific research.

One specific levy, the federal gas tax, funds highway and bridge construction as well as public transit. It has projected revenues of $37 billion this year.

As a native of Detroit who learned to drive on the nation’s first highway, I’m a big fan of our amazing interstate system and the U.S. routes that feed into it. I’m even a bigger fan of the road and bridge maintenance that helps make driving safe for the country’s 280 million motor vehicles. The federal gas tax pays for that, too.

So I normally wouldn't advocate for suspending such a vital levy, which has been 18.4 cents per gallon since 1993. I’m also loath to support President Donald Trump’s misguided war in Iran.

But suspending the federal fuel tax would ease gas prices that have increased by an average of $1.52 per gallon nationwide since the war started. This is largely because Iran blocked the Strait of Hormuz, through which one-fifth of the world’s crude-oil supply passes.

Americans need some relief. Now.

President Donald Trump is asking Congress for a gas-tax “holiday.” A motley mix of Democrats and Republicans is backing his all for a gas-tax suspension. Republican Sens. Josh Hawley of Missouri and Rick Scott of Florida, along with Democratic Sens. Mark Kelly of Arizona and Richard Blumenthal of Connecticut, are among the lawmakers voicing support. Democrat Alex Vindman, running for the Senate in Florida, is on board.

“I’m hearing from Democrats, independents and Republicans alike about how surging gas prices are putting the squeeze on families’ budgets,” Vindman said in a May 12 statement.

While still a bit lower than the national average, the average gas price in Florida has surged from $2.88 to $4.34 a gallon since the start of the Iran war. With the national average hitting $4.53 per gallon, as of May 20, suspending the gas tax would provide only mild relief, about 4%. 

State gas taxes are higher in every state except Alaska, and in some states much higher, from California’s levy of 70.92 cents per gallon to 58.7 cents in Pennsylvania and 54.50 cents in Indiana. California drivers pay $6.16 per gallon on average, the highest price in the country.

“It’s a small percentage, but it’s, you know, it’s still money,” Trump said May 11.

Congress first imposed the federal gas tax in 1932 as the Great Depression drained federal coffers. It started at 1 cent per gallon. Had it merely kept up with inflation since then, the tax would be about 24 cents today. And inflation since 1993, when Congress last raised the tax, would put it at about 42 cents. So if anything, the gas tax is overdue for an increase.

But not now. Americans need some relief this summer. As mild as it might be, suspending the gas tax would be welcome at the start of vacation season, when Americans take to the roads in large numbers, and their fuel costs rise regardless of the price at the pump.

With growing bipartisan support, Congress should pass a six-month suspension of the federal gas tax. To prevent a big hit to the Highway Trust Fund, which relies on revenue from the tax, lawmakers should adopt a plan by Kelly and Blumenthal to offset the loss of highway funds with temporary transfers of general purpose funds from discretionary programs.

If Congress wanted to get creative, it could pair indexing the gas tax to inflation to meet future road needs with automatic, short-term suspensions in the event of price spikes caused by war, economic shocks or other special circumstances.