President Joe Biden called on Congress to suspend federal taxes on gasoline and diesel fuel for a three-month gas tax holiday in order to help ease financial pressures at the pump.
Biden is also urging states to suspend their own state taxes on gas or to provide similar relief. State taxes run up to an average of 30 cents on the gallon.
There is currently a 18.4 cents-per-gallon federal tax on gas, and a 24.4 cents-per-gallon federal tax on diesel fuel.
If the gas tax holiday is approved, and gas companies pass the savings onto consumers, Americans would save roughly 3.6 percent at the pump.
But whether gas companies would pass the savings onto Americans is a major question.
It also remains uncertain whether Congress will support the measure.
Republicans are coming out against it. Some Democrats worry that only oil and gas companies will benefit, and that the companies will not pass along the savings to consumers.
The call comes as the U.S. experiences soaring energy prices. Prices average at about $5 a gallon across the U.S., which is up from roughly $3 a year ago.
Biden said policymakers should do what is within their power to ease strain on families. He said companies need to pass on “every penny” in savings to the public. However, the government has no way to enforce passing the money onto consumers, so it may be that the gas companies keep the price where it is, and pocket the rest.
Biden said that he knows this is not alone going to fix the problem, but a gas tax holiday would provide families with some immediate relief as the government continues to work on bringing prices down for the long haul.
The gas tax helps fund highway infrastructure. If there were no taxes paid on gas and oil through September, reports say the government would lose an estimated $10 billion in funding.
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