Federal gas tax holiday may not save drivers money, lawmakers fear
(WFSB) - The gas tax holiday drivers have seen in Connecticut could happen on the national scale.
President Joe Biden is pushing for a pause on the 18-cent federal tax on gas.
However, the idea has been met with a lot of skepticism.
When Connecticut’s gas tax pause went into effect, people did see some relief.
Despite it, prices inched back up.
Economists said they are concerned the same move on the federal level might not save people that much money.
If the 18-cent federal gas tax were to be paused for three months, as Biden called for, the businesses wouldn’t have to pay it.
The problem would be, according to economists, that any significant price drop at the pump would depend on oil companies to pass the savings onto consumers.
That’s something lawmakers aren’t sure would happen.
“We have no evidence to think that the oil companies would pass that on to the consumer,” said Rep. Nancy Pelosi, Democrat and House Speaker.
“I want to get more data on whether this kind of savings would actually be passed on to consumers,” said Sen. Mark Warner, Democrat from Virginia.
The White House is also skeptical.
“If we could get states to join in, and if oil companies and refineries [join], to pass on those cost savings to consumers,” said Gene Sperling, senior advisor to Biden.
Plus, some states have had a tough time instituting their own gas tax pauses because those dollars are tied to fixing roads. That means some states would see even less relief.
Experts are also concerned lower gas prices could boost inflation.
Global issues are also restricting supply.
“We have a supply problem that needs to be dealt with if you want to get prices down, so it doesn’t deal with the problem,” said Sen. Chuck Grassley, Republican from Iowa.
Some economists worry that lower gas prices would lead to more demand, which could result in more inflation and higher interest rates.
The Federal Reserve chair is set to testify before a House committee on Thursday and has already indicated that another rate hike could be on the way.
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