Trump proposes gas tax holiday; long-term funding for roads in question
The Story
President Trump has called for a temporary waiver of the federal gas tax, which costs drivers 18.4 cents per gallon, as gasoline prices hit four-year highs amid the oil trade disruption triggered by the war with Iran. A national gas tax holiday would require an act of Congress, and it is unclear whether the proposal will reach a floor vote. Meanwhile, the article reports that the federal gas tax has not collected enough to fully fund highway construction for years, with a projected shortfall of $17 billion in 2026.
Key Facts
- Trump called for a temporary waiver of the federal gas tax, which is 18.4 cents per gallon.
- The national average price for a gallon of gasoline is $4.46, up from around $3 prewar.
- Penn Wharton Budget Model estimates that about 13.2 cents a gallon in savings would reach consumers; Tax Foundation estimates about 16 cents.
- Revenue from the federal gas tax goes into the Highway Trust Fund for interstate construction, repair, and mass transit.
- The Penn Wharton Budget Model estimated Georgia’s two-month gas tax pause cost the state about $361 million.
- The last federal gas tax increase was in 1993, at 18.4 cents per gallon; it has not been raised since.
- For 2026, the shortfall for the Highway Trust Fund is estimated at $17 billion.
- AAA estimated that damage from potholes cost drivers $26.5 billion in repairs in 2021.
- A LendingTree report based on 2024 federal data found 8.9% of U.S. road miles in poor condition; Rhode Island had 31.5%, California 27.0%, and Massachusetts 24.5% rated poor.
- Minnesota reduced its share of poor road miles by more than 60% between 2019 and 2024.
- As electric vehicles grow in share, the gas tax collects less from those who use roads but do not buy gasoline; some states impose EV registration fees.
Conflicting Reports
No conflicting reports identified in the source article.
Still Unclear
No open questions identified in the source article.
Misconceptions
No widespread misconceptions addressed in the source article.
Key Figures
- President Trump
- Kent Smetters, faculty director at the Penn Wharton Budget Model
- Adam Hoffer, director of excise tax policy at the Tax Foundation
- Patrick De Haan, analyst with GasBuddy
- Rob Bhatt, insurance analyst at LendingTree
- Patrick Marshall, music teacher in New Orleans
- Carleen Quattrucci, Rhode Island resident
Sources: NPR
