Trump Gas Tax Holiday Raises Highway Funding Concerns
7 reported
President Trump has called for a temporary suspension of the federal gasoline tax, a move intended to address voter frustration with rising gasoline prices linked to the war in Iran. The tax costs drivers 18.4 cents per gallon, but waiving it would require congressional action, and it is unclear if bills introduced in recent months will go to a vote. NPR reports that the federal gas tax has not been raised in more than 30 years and no longer covers the cost of the nation’s highways. Road repairs have become more expensive, while cars have become more efficient and per-capita driving has declined, causing the highway fund to run short. Adam Hoffer of the Tax Foundation noted that politicians, drivers, and voters all dislike gas taxes, making increases a political challenge. Additionally, the rise of electric vehicles, which use highways but not gasoline, further reduces gas tax revenue. Alternatives such as higher EV registration fees, vehicle weight-based fees, and road usage fees are being considered by some states.
What’s reported
President Trump has called for a temporary suspension of the federal gasoline tax.
The federal gas tax is 18.4 cents per gallon and has not been raised in more than 30 years.
The tax is a fixed cents-per-gallon rate, not a percentage, so it does not change with gasoline prices.
The federal highway fund has been running on empty for years because road repairs have become pricier, cars are more efficient, and people drive less per capita.
Adam Hoffer of the Tax Foundation stated that nobody likes gas taxes, making increases a political challenge.
Electric vehicles use highways but do not pay gas taxes, further shrinking revenue.
Some states have tried higher EV registration fees, vehicle weight-based fees, and road usage fees as alternatives.
Key figures
President Trump
Camila Domonoske (NPR reporter)
Scott Detrow (NPR host)
Adam Hoffer (Tax Foundation)
Sources: NPR
