4 Major Flaws with Biden’s Gas Tax Plan
On Wednesday, President Joe Biden called on Congress to pass legislation that would temporarily halt the federal tax on gas and diesel fuel for three months.
Greg Valliere, a chief strategist at AGF Investments, listed four problems with Biden’s proposed plan, saying it’s “a bad idea.”
1. Puny savings.
Right now, the federal gas tax is 18.4 cents per gallon. Under a gas tax holiday, consumers would save $2.76 filling up a 15-gallon tank.
2. Potential to increase gas demand.
Even if the puny gas tax holiday savings were to entice consumers, then they might load up on gas, increasing demand and driving up prices.
3. Less money for the federal highway fund.
Revenue from the federal gas tax goes to finance the construction, maintenance, and repair of highways and other types of infrastructure. For each month a gas tax holiday is in effect, the infrastructure fund would lose more than $2 billion.
4. It probably won’t pass the Senate.
House Speaker Nancy Pelosi (D-CA) has previously said she is not in favor of a gas tax holiday. Neither is Sen. Joe Manchin (D-VA). Even Sen. Tom Carper (D-DE), a close ally of Biden’s, said a gas tax holiday is “shortsighted and inefficient.”