During the 2008 presidential campaign, then-candidate Barack Obama dismissed the effectiveness of so-called gas tax holidays as little more than a “gimmick.” To be more specific, he said they weren’t effective at achieving the stated intent of providing consumers relief from high gas prices. Nevertheless, this is the policy that President Biden on Wednesday has called on Congress to support. And it comes, of course, in the face of soaring prices at the pump as well as record-high inflation.
“The price of gas is up dramatically around the world, and by almost $2 per gallon in America, since (Russian President Vladimir) Putin began amassing troops on the border of Ukraine,” notes a White House news release.
Gas tax holiday
Biden reportedly wants an act from Congress that suspends federal gasoline and diesel taxes for three months. The former amounts to 18.4 cents per gallon, and 24.4 cents per gallon for the latter. With gas prices now averaging about $5 a gallon around the country, this would save consumers a reported 3.6 percent at the pump every time they fill up. And that should partly help illustrate why even Obama has downplayed this policy suggestion in the past.
Let’s say it costs you $100 to fill up your tank. A savings of 3.6 percent would amount to a grand total of … $3.60. Meanwhile, there’s also nothing to stop oil companies from responding to the tax holiday by raising their prices.
No wonder during 2008, Obama panned this same idea thus. “We’re arguing over a gimmick to save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say that they did something.”
“Shortsighted and inefficient”
Even members of Congress from Biden’s own party don’t seem thrilled with the idea of a gas tax reprieve. West Virginia Democratic Senator Joe Manchin, long a thorn in the side of Biden’s stimulus efforts, doesn’t think a gas tax holiday will necessarily have the effect that the White House is hoping for.
Democratic Senator Tom Carper of Delaware also took to Twitter in response to all this. He noted that, while it’s a good thing the president is trying to figure out how to offset the high prices of gas, a gas tax holiday is not the way to go about it. The taxes pay for infrastructure needs, he pointed out. And that suspending those taxes amounts to a “shortsighted and inefficient way to provide relief.”
In reality, the Biden administration has had a bit of a ham-fisted messaging strategy when it comes to talking about gas prices and the economy for months now. Even before settling on the idea of a gas tax holiday, for example, Transportation Secretary Pete Buttigieg came off as flippant when he suggested that consumers simply buy an electric vehicle as one way around the rising prices.
The administration’s messaging, at times, has also amounted to basically a shrug. Buttigieg stressed in another interview that gas prices aren’t set “by a dial in the Oval Office.”