President Donald Trump opened an intense debate in Washington this week by announcing his intention to temporarily suspend the federal gas tax. The measure comes as a direct response to sharp price increases at gas stations. The national average cost has already exceeded the historic mark of $4.50 per gallon amid the Middle East crisis.
Currently, the U.S. government charges a fixed federal tax of 18.4 cents per dollar for each gallon of regular gasoline and 24.4 cents for diesel. This money does not go toward general government spending, but instead goes directly into the Highway Trust Fund. This financial reserve is key and is used exclusively to maintain highways, build bridges, and develop major road infrastructure projects throughout the country.
According to Trump, his administration’s intention is to temporarily eliminate this additional 18-cent charge to give an economic break to the pockets of Latino consumers and the rest of the country. “We are going to eliminate the gas tax for a period of time, and when the price goes down, we will allow it to be gradually reintroduced,” the Republican president said Monday during an interview.
Why Did Fuel Prices Rise So Much?
The presidential proposal to freeze the federal tax is not an isolated measure, but rather a response to the current international emergency. The price of oil and hydrocarbons has skyrocketed dramatically in international markets. This is due to the war initiated by the United States and Israel against Iran. Added to this is the subsequent naval blockade that Tehran imposed on the strategic Strait of Hormuz.
This serious disruption in global trade routes caused supply shortages and pushed the national average price of regular gasoline to $4.52 per gallon at the beginning of this week. According to the AAA automotive association, this record figure represents an economic increase of more than 50% since the military conflict began in February.
Facing this logistics and energy crisis, the relief proposed by Trump would be notable but limited. If the tax is suspended entirely, drivers would save exactly 18.4 cents per gallon of regular gasoline. Although in a 15-gallon tank the savings amount to just $2.75, supporters of the measure claim that every cent helps working families mitigate the strong inflationary pressure.
Can Trump Remove the Tax by Executive Order?
Despite public promises made by President Trump, the Executive Branch cannot suspend, eliminate, or modify any type of federal tax unilaterally. For this measure to go into effect and prices to drop at the pump, the U.S. Congress must debate, vote, and approve the corresponding legislation. This requires the support of both Republicans and Democrats.
