As Joe Biden is announcing his proposal for a gas tax holiday, a bipartisan coalition of economists, Members of Congress, and energy industry experts agree: this idea is a politically-motivated gimmick that would not only have little effect on the price at the pump, it would actually make inflation worse.
Notably, even former President Obama once said of a gas tax holiday: “We’re arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say they did something. Well, let me tell you, this isn’t an idea designed to get you through the summer, it’s designed to get them through an election.”
Economists
- Former Obama economic advisor Jason Furman: “The gas tax holiday… is a worse idea now” than it was in February when first considered, and it “would also add to inflation.”
- Former Clinton and Obama economic advisor Larry Summers: “short sighted, ineffective, goofy, and gimmicky.”
- Former Obama Treasury official Gilbert Metcalf: “the bulk of the tax cut will not be going to consumers…”
- Democrat and former Trump economic advisor Gary Cohn: “The unintended consequences of getting rid of the tax are enormous. The gas tax idea, although it looks like it solves the problem today, it actually creates, I think, more problems down the road.”
- Moody’s Analytics chief economist Mark Zandi: “None of these ideas so far will help to a meaningful degree, and could do some harm because they could juice up demand at a time supply is constrained by the pandemic and worsen inflation…”
- Haverford College economics professor Carola Binder: the proposal would “lead to more inflationary pressures elsewhere.”
Members of Congress
- House Speaker Nancy Pelosi (D-CA): “described a gas tax holiday as ‘good PR,’ but told reporters that she had a number of concerns, including the fact there is ‘no guarantee that the reduction in the federal tax would be passed on to the consumer.’”
- House Transportation Committee Chairman Peter DeFazio (D-OR): “Suspending the 18.4 cents per gallon federal gas tax is not going to give consumers significant relief—if any at all.”
- Senator Joe Manchin (D-WV): The proposal “just doesn’t make sense.”
- Senator Mark Warner (D-VA): Said he would “be very averse to taking away infrastructure funding even in the short term.”
- Senator Ben Cardin (D-MD): “expressed reservations” about the proposal, saying he would focus “on policies that would lower the cost of living…”
Energy industry experts
- Bill Sullivan of the American Trucking Association: “seems driven by short-term political intererst and poorly targeted to relieve the drivers of fuels and other inflation.”
- Beth Osborne of Transportation for America: “not a serious attempt.”
- Ed Mortimer of the US Chamber of Commerce: Called the proposal a “temporary stunt” because it offers “no promise of actually helping lower prices for consumers or improving the economy.”
“The politically-motivated gas tax suspension is a gimmick pushed by desperate Democrats hoping to distract voters from their record of kneecapping American energy production and driving the price at the pump higher. Experts from across the ideological spectrum agree this isn’t a serious solution, it’s a talking point that could make inflation even worse. Voters will remember when they needed relief, Democrats were more concerned with protecting their own jobs than saving families from pain at the pump.” -SLF Communications Director Jack Pandol