Trump administration considering federal gas tax suspension

President Donald Trump indicated on Tuesday that his administration is contemplating the suspension of the federal gas tax. When asked about the possibility, Trump stated, "We're thinking about that."

This consideration aligns with proposals from Republican lawmakers in both the House and Senate. These proposals aim to temporarily suspend the federal excise tax on gasoline and diesel fuel, a move publicly supported by President Trump amidst current high fuel prices. Senator Josh Hawley (R-MO) introduced the Gas Tax Suspension Act, S. 4485, which would reduce the tax rate on non-aviation gasoline and diesel fuel to zero for at least 90 days, with the president having the authority to extend it for another 90 days based on economic conditions. Hawley cited national average prices exceeding $4.50 per gallon for regular gasoline and nearly $5.70 per gallon for diesel as justification.

Concurrently, Representative Jeff Van Drew (R-NJ) announced a similar bill that would also suspend federal fuel taxes on gasoline and diesel, and additionally on aviation gasoline. Van Drew's proposal suggests a longer relief period of 18 months, followed by a gradual reintroduction of the taxes. He also encouraged states to consider suspending their own gas taxes, noting New Jersey's state gas tax is about 49 cents per gallon.

Previous proposals for gas tax relief have also come from Democrats, including Representative Brendan Boyle (D-PA) and Senator Mark Kelly (D-AZ), with differing triggers and timelines. However, experts caution that suspending the gas tax could impact funding for highway construction and maintenance, as revenue from these taxes comprises approximately 85% of the Highway Trust Fund's highway account. The fund has faced deficits since 2001, with Congress previously addressing shortfalls through transfers from the Treasury's General Fund.