Trump gas tax holiday won’t lower prices much, analyst says

• Former President Donald Trump has proposed temporarily suspending the 18-cent federal gas tax.
• One analyst claims the "Iran war premium" adds more to gas prices than the federal tax.
• Suspending the federal gas tax requires an act of Congress, and some lawmakers from both parties have introduced such legislation.

President Donald Trump's proposal to temporarily suspend the 18-cent per gallon federal gas tax won't do much to erase big jumps in pump price that have occurred since the Iran war began, one prominent fuel industry analyst said.

"Washington is debating suspending the 18.4¢ federal gas tax. But nobody is talking about the REAL tax Americans are paying: the Iran war premium," Patrick De Haan, head of petroleum analysis at GasBuddy said in an X post. "It’s adding roughly $1.35 per gallon right now, costing drivers about $571 million today alone. Over 71 days? Nearly $28 billion."

Trump said in a telephone interview with a CBS News reporter that he thinks it would be a "great idea" to temporarily lift the gas tax.

"Yup, 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," Trump said.

The push to suspend the federal gas tax comes as the average price of gas reached $4.50 on May 12, according to the AAA Auto Club. That's up from a national average gas price of $2.98 on Feb. 28, the day the United States first launched military strikes against Iran.

How are lawmakers responding to Trump's proposal to suspend the gas tax?

Trump cannot unilaterally suspend the federal gas tax because it was authorized by Congress. A suspension or elimination of the federal gas tax would require another act of Congress.

At least one lawmaker, Sen. Josh Hawley, a Republican from Missouri, said he planned to introduce legislation on May 11 that would suspend the federal gas tax. Additionally, a pair of Democratic lawmakers in the Senate also introduced legislation March 13 that called for the suspension of the federal gas tax until Oct. 1 in light of the nation's escalating gas prices.

"This legislation temporarily suspends the federal gas tax, lowering high gas prices, squeezing consumers and bringing much-needed financial relief to American families,” said Sen. Richard Blumenthal, a Democrat from Connecticut who coauthored the Democratic gas tax holiday bill.

The largest lobbying group for carmakers in Washington, the Alliance for Automotive Innovation, has also recently come out in support of a plan to eliminate the federal gas tax in favor of a new vehicle fee that would be based on the weight of cars.

How much is the federal gas tax?

The federal government has been collecting taxes on every gas purchase made at a U.S. station since the 1930s. The current rate of 18.4 cents per gallon was established by a law that was passed by Congress in 1993. Transportation funding advocates have lamented the fact that Congress has not moved to increase the gas tax in over three decades.

The federal gas tax was first established in 1932 at a rate of 1 cent per gallon. Congress has approved increases multiple times since then, and some lawmakers have called to tie the tax to inflation as votes to increase taxes have become politically difficult for lawmakers who are up for election.

What is gas tax money used for?

The gas tax is typically authorized by Congress each time it adopts a federal highway funding bill because the revenue it generates is used to fund the Department of Transportation’s Highway Trust Fund. The Highway Trust Fund is distributed to states to help pay for road and transit construction projects.

As cars have become more fuel-efficient and more drivers have opted for electric vehicles and hybrids, the government has collected less money despite increased use of roads. Lawmakers have been looking for ways to close that growing gap in federal gas‑tax revenue.

Which states have the highest gas taxes?

On top of the 18-cent federal gas tax that every driver pays each time they fill up their tanks, each state tacks on its own local gas tax.

Here are the top 10 states with the highest gas taxes, including the federal tax, according to the Tax Foundation, and their current gas price averages, according to AAA:

1. California

• Gas Tax: 71 cents per gallon
• May 12 Gas Price Average: $6.15

2. Illinois

• Gas Tax: 66 cents per gallon
• May 12 Gas Price Average: $4.97

3. Washington

• Gas Tax: 59 cents per gallon
• May 12 Gas Price Average: $5.76

4. Pennsylvania

• Gas Tax: 59 cents per gallon
• May 12 Gas Price Average: $4.66

5. Indiana

• Gas Tax: 55 cents per gallon
• May 12 Gas Price Average: $4.31

6. Michigan

• Gas Tax: 48 cents per gallon
• May 12 Gas Price Average: $4.71

7. Maryland

• Gas Tax: 46 cents per gallon
• May 12 Gas Price Average: $4.45

8. New Jersey

• Gas Tax: 45 cents per gallon
• May 12 Gas Price Average: $4.52

9. Virginia

• Gas Tax: 42 cents per gallon
• May 12 Gas Price Average: $4.28

10. Rhode Island

• Gas Tax: 41 cents per gallon
• May 12 Gas Price Average: $4.48