top of page

Our Recent Posts

Gas Pump Gimmicks

By Matt Patterson, June 29, 2022

Americans are feeling economic pain at the gas pump. According to the American Automobile Association, the current national average price of gas in the US is just under $5 per gallon (although it is much higher in many states).[i] This is about $2 more per gallon than the average just one year ago.[ii] The Biden Administration has stated, “The price of gas is up dramatically around the world, and by almost $2 per gallon in America, since Putin began amassing troops on the border of Ukraine.”[iii] While the Russian invasion of Ukraine no doubt had some impact on the price at the pump, it should be noted that the price had already risen $1 per gallon over the previous year by February 2022, with the invasion launching February 24th of 2022.[iv] Even so, Biden has called on Congress and states to “take additional action to provide direct relief to American consumers” who are experiencing high gas prices.[v]

The Biden Administration is calling on Congress to suspend the federal gas tax for three months and is calling on states to take similar action.[vi] In a statement regarding the gas tax holiday, the Administration admits, “President Biden understands that a gas tax holiday alone will not, on its own, relieve the run up in costs that we’ve seen.”[vii] CNN writes that “if it gets through Congress, a gas tax holiday would deliver swift – albeit modest – relief to consumers by lowering the retail gasoline prices by as much as 18 cents a gallon.”[viii]

CNN is being generous when calling relief from the proposed gas tax holiday “modest.” It is estimated that a person who drives 12,000 miles a year in a car that averages 25 miles per gallon would only save $7.36 per month (or, approximately, a gallon of gas).[ix] There is little evidence to suggest that the tax holiday would be helpful at all, and many experts believe the move could increase inflation and further damage the gasoline supply and demand balance. The Committee for a Responsible Budget sent out a warning in February of 2022, discouraging a gas tax holiday.

This week, a group of senators introduced legislation to suspend the federal gas tax through December 2022 amid rising inflation. We estimate the proposed gas tax holiday would reduce gas tax revenues by roughly $20 billion and could worsen inflation once the holiday expires…While the gas tax holiday may reduce prices at the pump, it will further increase demand for gasoline and other goods and services at a time when the economy has little capacity to absorb it. The result could be even higher rates of inflation in 2023.[x]

Suspending the federal gas tax for relief at the pump is the equivalent of attempting to put out a forest fire with a squirt gun. Further, similar to the eviction moratorium and suspension of student loan payments during the pandemic, the administration will face a big problem when the holiday expires: reimpose the tax, which would be painful to consumers, or extend the holiday.[xi]

Thankfully, it appears the plan is dead on arrival in the actual legislative bodies and should not be taken seriously. Indeed, President Biden’s former boss, President Obama, dismissed the idea of a gas tax holiday out of hand, calling it a “gimmick” in 2008 while on the campaign trail. After Hillary Clinton and John McCain both proposed such a holiday, President Obama said “the easiest thing in the world for a politician to do is tell you exactly what you want to hear.”[xii] Nevertheless, despite disapproval from his former boss, the Biden Administration is persisting.

This administration would like the American people to believe that “President Biden understands that high gas prices pose a significant challenge for working families.”[xiii] But does he? According to the American Energy Alliance, the Biden Administration has taken over 100 actions “deliberately designed to make it harder to produce energy…” with “32 of those proclamations enacted after the Russian invasion of Ukraine.”[xiv] Just last month, amid record high gas prices, the Administration announced the canceling of a lease sale of over one million acres in Alaska, as well as a lease sale in the Gulf of Mexico.[xv] These anti-energy decisions exacerbate inflation and put stress on the pocketbooks of working families around the country. This Administration wants to appear as if it is doing something to lower gas prices, but the proposed holiday is nothing more than a gimmick.

[i] [ii] Ibid. [iii] [iv] [v] [vi] Ibid. [vii] Ibid. [viii] [ix] [x] [xi] [xii] [xiii] [xiv] [xv] Ibid.


bottom of page