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Biden calls on Congress and states to suspend gasoline taxes

President Biden will call on Congress on Wednesday to suspend the federal gasoline tax for three months and ask states to suspend their own gasoline taxes or provide commensurate relief to consumers, according to the White House.

The federal government charges a tax of 18.4 cents per gallon for gasoline and a tax of 24.4 cents per gallon for diesel. Suspending the tax for three months — until the end of September, as Biden will demand — will cost about $10 billion, the White House said.

When asked if Biden thinks Congress could somehow order oil companies to pass those savings, in full, on to consumers, a senior administration official did not answer. said directly, but noted that there is “some evidence that state tax suspensions, in particular, are passed on.” to consumers.” Biden is scheduled to deliver remarks at the White House complex at 3 p.m. ET on Wednesday.

The official, in a Tuesday night call with reporters, said “the president is absolutely calling on companies to make sure these savings are passed on to consumers.”

The administration is also putting public pressure on oil companies to help Americans in times of financial need.

“Corporations, of course, are accountable to their shareholders, but they really need to be accountable and aware of customers, their neighbors and their fellow citizens, just like this administration does,” said another senior administration official. to journalists. “And we hope that’s the spirit that the CEOs of these companies will embrace.”

US Energy Secretary Jennifer Granholm is due to meet with oil refining executives on Thursday.

On Wednesday, Biden will also call on state and local governments to provide “relief” to Americans by suspending their state gasoline taxes or offering other remedies, such as delaying planned increases in taxes and fees, or even consumer rebates or relief payments, according to the White Loger. One official said Biden wanted states to “match” what the federal government would do in the short term.

State gasoline taxes average about 31 cents per gallon of gasoline, according to the US Energy Information Administration.

Researchers from the Wharton School at the University of Pennsylvania recently found that the suspension of gasoline taxes in Maryland, Georgia and Connecticut was, in fact, “mostly passed on to consumers at some point during the ‘tax exemption in the form of lower petrol prices’, but that the lower prices ‘were often not maintained for the duration of the holiday’.

In Maryland, 72% of tax savings were passed on to consumers; in Georgia, 58-65% were, and in Connecticut, 71-87% were, according to their analysis.

A federal gasoline tax exemption “isn’t going to solve the whole problem,” the official said. “It’s something that can be done to take real action to relieve some of that pain at the pump. And we see it as part of a suite of policies designed to provide that relief, including policies focused on offer.”

Asked why Biden wanted the federal tax suspended for three months in particular, the official said the president wanted to balance the need for the “unique moment in which we find ourselves” – particularly during driving season. summer – with the fact that the tax provides significant revenue to the government to pay for highways and other transportation projects.

“The purpose of this suspension,” the official said, “is really to address the unique moment we find ourselves in, and with a particular focus on the summer driving season and the pain families are feeling at the pumps in now, while recognizing that in the longer term, the gas tax is an important source of revenue for federal infrastructure.

Gas tax revenues go to the federal government’s Highway Trust Fund, which covers much of the government’s spending on highways and public transit. Biden thinks Congress can fill that roughly $10 billion gap with “other revenue,” an official said.

When asked if that money would come from last year’s $1.2 trillion infrastructure bill, which Biden signaled his opening on Tuesday, the official didn’t say but noted that there were proposals in Congress that would cover the shortfall.

The official said the administration was “encouraged that” members of the House and Senate have already made proposals similar to what Biden will call on Wednesday, but suggested the White House has yet to engage. in-depth dialogue with members of Congress on this subject. topic – saying “we hope” to engage with Congress.

The official also said that all of Biden’s proposed policies — from gasoline tax holidays to pressuring oil refiners to increase capacity — could, combined, save consumers up to $1 a year. gallon or more. But that assumption is based on steps that retailers and oil refiners have yet to show a willingness to take.

“President Biden understands that a gas tax exemption alone will not be enough to alleviate the increased costs we have seen,” the White House said in a statement. “But the President believes that at this unique time when the war in Ukraine is imposing costs on American families, Congress should do what it can to allow working families to breathe.”

ABC News

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