Will a gas tax holiday actually help American consumers save money? Not according to multiple high-profile Democrats and energy experts.
On Wednesday, President Joe Biden called on Congress to enact a “three-month federal gas tax holiday” and suspend the 18.4 cents federal gas tax to help alleviate pain at the pump for Americans this summer. This temporary solution has long been blasted for its failure to address the root cause of high gas prices.
During the 2008 presidential campaign, then-candidate Barack Obama ridiculed his opponents for advocating for the temporary solution.
More recently, when asked about a potential gas tax holiday, Pelosi told reporters this past spring that the idea does not actually help consumers.
“We have a situation where there’s money coming out of the highway trust fund. It’s going to the oil companies,” Pelosi argued. “There, they may not give it to the consumer and it has to be paid for. So we’re paying for something to give a break to the oil companies, that isn’t even going to the consumer. So that’s the con.”
“The pro is very show biz, okay?” she continued, “‘Let’s just do something. There it is.’ But it is not necessarily landing in the pocket of the consumer. It’s taken out of the trust fund we have to pay for that to return it,” she explained.
In 2008, Sens. John McCain (R-AZ) and Hillary Clinton (D-NY) proposed enacting the gas tax holiday. Obama blasted the two for it, for similar reasons uttered by Pelosi.
“We don’t know that the oil companies will actually pass on the savings,” Obama said at the time. “So you’re saving 5% in terms of the gas tax. It’s not clear what would prevent the oil companies from just jacking up prices 5%. So you end up giving them more money. And we’ve drained the Highway Trust Fund. Now, this is the problem with Washington. We’re facing a situation where oil prices could hit $200 a barrel.”
“Oil companies like Shell and BP just reported record profits for the quarter and we’re arguing over a gimmick to save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say that they did something,” he added.
In an email sent to The Daily Wire, Katie Tubb, a Heritage Foundation research fellow for energy and environmental issues, explained that a reversal of Biden’s environmental policies is what is actually needed to help lower prices.
“Gas is almost $3 more expensive per gallon today than when Joe Biden took office, and his latest ‘solution’ is a temporary measure to lower prices 18 cents,” Tubb explained. “While taxes fundamentally increase the cost of all goods, Americans who are struggling intuitively see this move for the unserious response that it is.”
Tubb claimed that “new Heritage research shows that Biden’s energy policies would increase gasoline prices by more than $2 a gallon every year between 2024 and 2040.”
The gas tax holiday actually could backfire, and drive prices up even more as more motorists hit the road and buy gas.
“And, ironically, temporarily suspending the tax could actually artificially incentivize short-term demand, driving prices right back up and wiping out any of the already-meager savings Americans might experience,” she said.
Tubb has previously explained to The Daily Wire that Biden’s energy strategy disincentives oil and gas investment.
“The solution is obvious — the Biden administration needs to unleash domestic energy production and take advantage of America’s abundant energy resources,” she said on Wednesday. “That will put downward pressure on prices both in the short and long term. Instead of an election-year gimmick, Biden should show leadership and work with Congress to allow more domestic production and unleash our energy sector’s capacity to explore, drill, refine, and transport.”
Even Biden himself admitted on Wednesday that the “gas tax holiday alone will not, on its own, relieve the run up in costs that we’ve seen. “