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Some states want to give drivers a gas tax holiday

Until about December, we saw a lot of inflation as people demanded more goods because the economy was recovering from the pandemic and supply chains were squeezed after December. When Putin began to be more aggressive toward Ukraine, we began to see oil prices rise in gasoline prices, and as those prices rise, Americans are paying, that’s a different cause. That’s different from what drove inflation before. And what we have seen so far is that other oil producers, such as Saudi Arabia, are not committing to increasing supplies because no one is committing to increasing supplies at a time of tremendous geopolitical uncertainty. Markets are trying to set the price and that means everyday Americans are going to pay more at the pump. We still depend somewhat on the rest of the world and prices are set by global supply and demand. We are not protected or even protected from those forces. We really have the last political enigma in which President Biden has to solve the problem that he did not necessarily cause and on which he has little influence. And yet, voters expect him to do just that

Some states want to offer drivers a vacation in gas tax. But it may not be a wise move.


As Americans recover from soaring gasoline prices, a growing number of states are seeking to offer their residents a small relief by suspending their gas taxes. a gallon. Proceeds are usually used to repair and expand transportation infrastructure. Gas taxes have been scrutinized as prices have risen, driven in part by Russia’s invasion of Ukraine, which began last month. Nationwide, a gallon of regular gasoline cost an average of $ 4.32 as of Thursday, according to AAA. A month ago, the price was $ 3.48 a gallon. Maryland residents will soon be able to rest at the gas station. Republican Gov. Larry Hogan said Thursday that strong state revenue estimates and a record surplus will allow him and lawmakers to ease the gas tax by about 36 cents a gallon. “At this time of global uncertainty, we are working on an emergency. Gasoline tax suspension to alleviate the pain in the bomb,” Hogan tweeted. Georgia Gov. Brian Kemp, a Republican, said earlier this week that he plans to work with the General Assembly to suspend the state gas tax until May 31. The rate is about 29 cents a gallon. The goal is to “curb the very high prices of gasoline,” he said in a statement. “In these extraordinary times, every little bit helps, and we continue to focus on keeping our people and our economy moving,” said Republican spokesman David Ralston. In a statement to a press conference on Wednesday, Democratic Gov. gallon. . He proposed delaying an automatic annual gas tax increase to be held in July. Meanwhile, governors or lawmakers in Arkansas, Maine, Michigan, New York, Pennsylvania, and Virginia, among other states, support offering temporary vacation gasoline or reducing fares. California Gov. Gavin Newsom, a Democrat, called for a tax cut on Tuesday to help residents cope with higher gasoline prices in the country. Suspend federal gas tax Also this week, six Democratic governors wrote to congressional leaders urging them to lift the federal gas. tax for the rest of the year. They said they supported legislation introduced last month by a bicameral group of Democratic lawmakers that would allow the Federal Highway Trust Fund to remain intact by instructing the Treasury Department to transfer dollars from the general fund to replace lost gasoline tax revenue. . “Money saved at the bomb. It translates into dollars in consumers’ pockets for shopping, childcare, rent and more,” the governors of Colorado, Michigan, Minnesota, New Mexico, Pennsylvania and Wisconsin wrote. Drivers, and it could hurt state budgets and delay road improvements, said Lucy Dadayan, a senior associate researcher at the nonpartisan Tax Policy Center. Gas stations may not necessarily reduce their prices if states raise taxes, he said. In addition, although most state budgets are healthy at the moment, this can change rapidly, especially as the conflict in Ukraine and high inflation prolongs. “It is much, much more reasonable to give rebates to lower-income taxpayers,” Dadayan said, noting that raising the gas tax for all is not fiscally fair. “But eliminating or temporarily suspending gas taxes is not a prudent fiscal policy.”

As Americans recover from soaring gasoline prices, a growing number of states are seeking to offer a small relief to residents by suspending their gasoline taxes.

Almost all states charge taxes or other fees on gasoline sales, in addition to the federal gas tax of 18.4 cents per gallon. Proceeds are usually used to repair and expand transportation infrastructure.

Gasoline taxes have been scrutinized as prices have risen, driven in part by the Russian invasion of Ukraine, which began last month. Nationwide, a gallon of regular gasoline cost an average of $ 4.32 as of Thursday, according to AAA. A month ago, the price was $ 3.48 a gallon.

Maryland residents will soon be able to rest at the gas station. Republican Gov. Larry Hogan said Thursday that strong state revenue estimates and a record surplus will allow him and lawmakers to ease the gas tax by about 36 cents a gallon.

“At this time of global uncertainty, we are working on an emergency suspension of the gasoline tax to alleviate the pain in the pump.” he tweeted Hogan.

Georgia Gov. Brian Kemp, a Republican, said earlier this week that he plans to work with the General Assembly to suspend the state gas tax until May 31. The tax is approximately 29 cents per gallon. The goal is to “curb the very high prices of gasoline,” he said in a statement.

“In these extraordinary times, every little bit helps, and we continue to focus on keeping our people and our economy moving,” Republican David Ralston, Speaker of the Georgian House, said in a statement.

In Illinois, Democratic Gov. JB Pritzker said at a news conference Wednesday that the state can provide some relief to residents by easing the pressure on the gas tax, which is just over 39 cents a gallon. He proposed delaying the annual automatic gasoline rate hike that will take place in July.

Meanwhile, governors or lawmakers in Arkansas, Maine, Michigan, New York, Pennsylvania and Virginia, among other states, support offering temporary gas vacations or reducing tariffs. California Gov. Gavin Newsom, a Democrat, called for a tax cut on Tuesday to help residents cope with higher gasoline prices in the country.

Suspension of federal gas tax

Also this week, six Democratic governors wrote to congressional leaders urging them to raise the federal gas tax for the rest of the year. They said they supported legislation introduced last month by a bicameral group of Democratic lawmakers that would allow the Federal Highway Trust Fund to remain intact by instructing the Treasury Department to transfer dollars from the general fund to replace lost gas tax revenue. .

“The money saved on the bomb translates into dollars in the pockets of consumers for shopping, childcare, rent and more,” the governors of Colorado, Michigan, Minnesota, New Mexico, Pennsylvania and Wisconsin wrote.

Questionable impact

But the suspension of the state gas tax may not really help drivers much, and it could hurt state budgets and delay road improvements, said Lucy Dadayan, a senior associate researcher at the Center for Nonpartisan Fiscal Policy.

Gas stations may not necessarily lower their prices if states raise their taxes, he said. In addition, although most state budgets are healthy at this time, this can change rapidly, especially as the conflict in Ukraine and high inflation prolongs.

In contrast, states may want to offer more targeted assistance to lower-income residents, who have more difficulty coping with rising gas prices.

“It is much, much more reasonable to give rebates to lower-income taxpayers,” Dadayan said, noting that raising the gasoline tax for all is not fiscally fair. “But eliminating or temporarily suspending gas taxes is not a prudent fiscal policy.”



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