Start United States USA — Political Biden Just Proposed a Gas Tax Holiday. Will It Work?

Biden Just Proposed a Gas Tax Holiday. Will It Work?

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The president’s idea isn’t a new one. Republicans like Glenn Youngkin and Ron DeSantis got there first.
When President Biden on Wednesday proposed a three-month suspension of federal taxes on gasoline and diesel, many Republicans rolled their eyes. And many Democrats wondered what had taken him so long. Variations on the concept have bounced from state to state for nearly a year now, with governors leading the way. Ron DeSantis proposed canceling Florida’s gas tax back in November. Gavin Newsom has floated the novel idea of passing out debit cards to Californians to offset rising prices. In March, Brian Kemp, in perhaps the most nakedly political move of all, suspended Georgia’s gas tax through May 31 — just days after his primary. Four Democratic senators facing tough re-election bids — Catherine Cortez Masto of Nevada, Maggie Hassan of New Hampshire, Mark Kelly of Arizona and Raphael Warnock of Georgia — called in February for suspending the federal gas tax. At the time, their political aides were eager to portray Republicans as the bad guys. That might be precisely what Biden is hoping to accomplish now: goading Mitch McConnell, ever the useful foil in the Senate, into rejecting his idea so that the White House can blame Republicans for opposing economic relief for ordinary Americans who are short on cash. According to my colleagues Zolan Kanno-Youngs and Lydia DePillis, Biden used his speech on Wednesday to ask Congress to grant Americans “just a little bit of breathing room” by lifting the federal taxes — about 18 cents per gallon of gasoline and 24 cents per gallon of diesel — through the end of September, shortly before the fall midterm elections.
“I fully understand that the gas tax holiday alone is not going to fix the problem,” the president said. “But it will provide families some immediate relief.”
McConnell quickly dismissed the president’s call for suspending the tax as “silly,” noting that many Senate Democrats were skeptical of the idea. But privately, several Republican strategists said they worried that McConnell was misreading the moment. Policy wonks tend to be critical of politically motivated tax-relief gimmicks, arguing that they create the wrong kind of incentives. Climate experts say that the government ought to be discouraging the use of fossil fuels, not subsidizing them. Prices are supposed to send a signal to the marketplace, economists add, and messing around with them can create unpredictable distortions.

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