President Joe Biden on Wednesday will call on Congress to suspend federal gasoline and diesel taxes for three months — a move meant to ease financial pressures at the pump that also reveals the political toxicity of high gas prices in an election year.
The Democratic president will also call on states to suspend their own gas taxes or provide similar relief, the White House said.
Barack Obama, during the 2008 presidential campaign, called the idea a “gimmick” that allowed politicians to “say that they did something.” He also warned that oil companies could offset the tax relief by increasing their prices. Biden has acknowledged how gas prices have been a drain on public enthusiasm when he is trying to convince people that the U.S. can still pivot to a clean-energy future. In an interview with The Associated Press last week, Biden described a country already nursing some psychological scars from the coronavirus pandemic that is now worried about how to afford gas, food and other essentials.
Mark Zandi, chief economist at Moody's Analytics, estimated that the majority of the 8.6% inflation seen over the past 12 months in the U.S. comes from higher commodity prices due to Russia's invasion and continued disruptions from the coronavirus. Senate Republican leader Mitch McConnell mocked the idea of a gas tax holiday in a February floor speech. “They’ve spent an entire year waging a holy war on affordable American energy, and now they want to use a pile of taxpayers’ money to hide the consequences," he said.
The president has also called on energy companies to accept lower profit margins to increase oil production and refining capacity for gasoline.
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