Bloomberg | Bloomberg | Getty Images For months, drivers across the US have been experiencing impressive prices when filling their gas tanks. Now President Joe Biden is considering a new solution – a federal gas tax license. A gallon of gas now costs an average of $ 4.97, according to the AAA. This is a slight improvement over the beginning of this month, when the national average crossed the $ 5 mark for the first time. But prices are up from $ 4.59 a month ago and $ 3.07 a year ago. However, in some states – such as Washington, Oregon and Nevada – average gas prices are above $ 5.50 per gallon. In California, the average is currently $ 6.38 per gallon. More from Personal Finance: 80% of economists see “stagnant inflation” as a long-term risk. Stimuli re-control the way some Americans view money The federal gas tax is 18.4 cents per gallon, with states imposing their own contributions separately. In February, Democratic Sen. Maggie Hassan of New Hampshire and Mark Kelly of Arizona proposed a bill that would suspend the federal gas tax by the end of the year. The idea is drawing new attention from the Biden government, with Treasury Secretary Janet Glenn calling it “an idea definitely worth considering” in an interview with ABC News’ “This Week” on Sunday. Asked about Yellen’s comments, Biden said Monday that he was considering it.
Gas tax savings for consumers would be minimal
The idea of temporarily abolishing the federal gas tax has caused some criticism. A report by the University of Pennsylvania Penn Wharton Budget Model published in March found that saving resources from such a break would probably not be very significant for consumers. The savings per person could be only about $ 50 if implemented in March by the end of the year, Kent Smeters, a professor at the University of Pennsylvania’s Wharton School, told CNBC at the time. In addition, federal tax revenue will be cut by about $ 20 billion if a gas tax holiday is implemented by the end of this year, according to a March report. Gas taxes fund many important road safety projects. Andrew Gross AAA representative The problem is that most of the savings from these changes – whether at the federal or state level – will not be passed on to the consumer, Smetters said. It may also mean less money for the Highway Trust Fund, which finances roads and bridges, as well as other transportation costs. The Senate bill proposes to replace the tax revenue that normally goes to the Motorway Fund with transfers from the general fund. Federal taxes are a small part of consumer spending on gas, according to AAA spokesman Andrew Gross. The cost of oil is the biggest determinant of the cost of gas, at about 56%, he said. The rest includes about 14% for refining, 15% for distribution and marketing and the remaining 15% for federal and state taxes. The AAA has opposed the proposed federal legislation along with other organizations, including the American Association of Highway and Transportation Officers and the American Society of Civil Engineers. “Gas taxes fund many important road safety projects,” Gross said. “And it’s not that our road safety needs will take a break either.”
