Trump Supports Temporary Suspension of Federal Gas Tax to Lower Prices

President Donald Trump announced on Monday that he supports temporarily suspending the federal gas tax to provide relief to American drivers facing high fuel costs. “Yeah,” Trump said when asked if he would suspend the tax, which currently stands at about 18 cents per gallon. He added, “I’m going to reduce until the — let me tell you, as soon as this is over with Iran, as soon as it’s over, you’re going to see gasoline and oil drop like a rock.” When asked how long the suspension would last, Trump responded, “until it’s appropriate.”

Earlier in the day, Trump told CBS News that suspending the gas tax was “a great idea,” explaining, “We’re going to take off the gas tax for a period of time, and when gas goes down, we’ll let it phase back in.”

The federal gas tax suspension would require congressional approval. Democrats introduced legislation in March to suspend the tax until October, but the proposal has stalled. On Monday, Republican Sen. Josh Hawley and Rep. Anna Paulina Luna announced plans to introduce their own bills to suspend the tax, with Luna stating her office would work directly with Trump to deliver relief to American families. Democrat Rep. Chris Pappas, who co-led the March bill, urged swift action, saying, “This should have happened months ago. Let’s pass it this week.”

The federal gas tax funds the Highway Trust Fund, which supports highway and mass transit programs. A suspension could cost the government billions in revenue this fiscal year, according to the Bipartisan Policy Center. Experts estimate that even if the tax were suspended, gas prices would likely not drop by the full 18 cents per gallon. The Bipartisan Policy Center projects consumers would see a reduction of 10 to 16 cents per gallon, with the remainder benefiting gasoline suppliers.

Gas prices have surged more than 50% since the start of the conflict with Iran, with the national average at $4.52 per gallon on Monday. According to Andrew Lautz, director of tax policy at the Bipartisan Policy Center, “The irony of a gas tax suspension is that the higher prices go, the less of an impact it has.” Lautz noted that for an average sedan, filling up costs $18 to $25 more than before the war, while a federal gas tax holiday would save up to $2 per fill-up.

State-level actions have also emerged, with states like Georgia, Indiana, and Utah waiving local fuel taxes to offer more substantial relief. Indiana drivers have seen nearly a 60-cent per gallon discount, with prices falling below $4 at some stations, according to GasBuddy analyst Patrick De Haan. However, some state lawmakers remain cautious about suspending taxes due to concerns over funding for road maintenance.

De Haan estimated that a federal gas tax suspension would cost the government about $2.1 billion per month in lost revenue. Given the partisan divide in Congress and the upcoming Midterm elections, passing such a suspension faces significant challenges.