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President Biden to urge 3-month halt to federal gas tax

Biden to announce plan Wednesday afternoon
Iowa Gas Prices
Posted at 5:56 AM, Jun 22, 2022
and last updated 2022-06-22 15:24:17-04

President Joe Biden will urge Congress to suspend the federal gas tax to provide some relief to the high prices at filling stations.

Biden is expected to make his pitch Wednesday afternoon in a statement.

The federal gas tax is 18.4 cents per gallon for regular gas and 24.4 cents a gallon on diesel. The money is used to pay for road projects, often on interstates.

The White House estimates that eliminating the gas tax would cause revenue for the Highway Trust Fund to drop by $10 billion. The Biden administration said due to a $1.6 trillion drop in the deficit, the government can afford to suspend the gas tax while using other revenues to make the Highway Trust Fund whole.

A gas tax holiday could also spur a number of states to relax their taxes. On average, states charge a tax of 31 cents a gallon on regular gas and 32 cents a gallon on diesel.

While several states have already suspended their gas taxes, Biden will call on the rest of the U.S. to suspend their respective gas taxes, White House officials said.

While AAA reported that gas prices dropped below $5 per gallon on Saturday, the current rate of $4.95 a gallon remains $1.89 more than a year ago.