Most people agree with it. How to deal with it is a completely different story.
“By suspending the 18-cent petrol and federal gas taxes for the next 90 days, we can lower gas prices and give families a little more peace of mind,” Biden said in a White House speech.
But such a step is a long shot in Congress. Here’s what you need to know about the president’s proposal and why it’s likely to continue.
What is a Gasoline Tax Holiday?
Gas tax holidays are exactly what it sounds like. General taxes on gasoline and diesel purchases will be lifted for a period of time, providing consumers with some peace of mind.
These tax exemptions can come from the federal government, state governments, or both.
The income from the federal gas tax will help raise funds for the Highway Trust, which is already underfunded. The federal gas tax has not been raised since 1993, when gas was sold for just over $ 1 a gallon.
What does Biden’s federal proposal come with?
The federal tax on gasoline is about 18 cents per gallon, while the federal tax on diesel is 24 cents per gallon. Biden’s proposal will raise these taxes until the end of September.
“We fully understand that petrol tax leave alone won’t solve the problem, but we’re working on long-term price cuts, so families can quickly rest assured. We have a little extra time,” said the president. rice field. He said on Wednesday.
How useful is it?
Combined with other steps (which will be reached soon), senior management argues that Biden’s proposal can reduce the price per gallon of gas by $ 1.
But that number relies on some steps that are completely out of the control of the president, and some economists are skeptical that potential savings will reach even consumers.
“I’m not a fan. You want people to drive less and use less gas. This defeats that purpose,” he said. “Not targeted.”
Is there any state that has enacted a petrol tax holiday?
Independent pen The Wharton budget model reviews the tax exemption periods in Georgia, Maryland, and Connecticut, saying that “at some point during the tax exemption period, the benefits were primarily to consumers in the form of lower gas prices.” I found “evidence of causal relationship”.
Why is Biden’s proposal dead when it arrives in Congress?
Even if the president could put all 50 Democratic senators behind the legislation, he would need 10 Republicans to join the cause to advance the bill, which is very likely. It doesn’t seem to be.
Why do Republicans oppose it?
Republicans have expressed various concerns about raising the gasoline tax. A scan of Republican Senator tweets following Biden’s speech on Wednesday afternoon shows some of the sentiments he disagrees with:
Why does the Democratic Party oppose it?
Democrats, including Speaker of the House Nancy Pelosi, were calm about the idea that Barack Obama was a 2008 presidential candidate but named it “Gimmic.”
It sounds like Manchin and Carper are against it, so Democrats fail when they try to go through a procedure called reconciliation themselves. It only requires 50 votes to move forward.
Even Democrats who have expressed their support for Biden’s proposal do not sound particularly enthusiastic. Take Duck Durbin, Senator of the Democratic Party of Illinois.
He told CNN on Wednesday that he supported the proposal, but warned that the government and Congress need to be “honest” about the actual impact of effectively reducing gas costs. Durbin also warned that federal gas tax-backed infrastructure funding could be affected.
How is the Biden administration working on negotiations?
“Um, that’s … this is a conversation, isn’t it? The conversation is going on,” Granholm said at a press conference at the White House. “And I know those Democrats are also worried about the price their members are pumping, and so are Republicans-that’s a problem, and hopefully , You’ve never had a Republican holiday on petrol tax in the past, and more serious than now. “
Biden would “have these conversations with Democrats and Republicans,” she added. She said, “I hope both sides of the aisle are listening to their members about getting peace of mind. I think the citizens will be the loudest in the room.”
What other steps does Biden take?
Beyond his proposal to the federal government On a petrol tax holiday, the president called on the state to take steps to remove their own taxes on gas and diesel. He also urged oil refineries to increase their capacity prior to the upcoming meeting with government officials this week.
“My message is simple,” Biden said. “For companies that run gas stations and set their prices with pumps: this is a time of war, a global crisis, Ukraine-these are not normal times. Reflect the cost you are in. Lower the price you are billing for in the pump You are paying for the product. Do it now. Do it today. Your customers, Americans, they are in need of relief now increase.”
What is at stake for Biden?
many. Gasoline prices and inflation are one of the Democrats’ greatest political responsibilities towards the November midterm elections.
Biden and his administration have repeatedly blamed Russia’s President Vladimir Putin and his war against Ukraine for rising gas and energy prices, but experts have also blamed high demand, clogged supply chains and housing. Other factors such as rising costs and Covid-19 stimulus are also mentioned. As the reason behind the soaring prices.
Only 23% rated the economy as somewhat favorable, down from 37% in December 2021 and 54% in April 2021.
Americans also said they are more likely to hear bad news than good news about the economy, almost 4: 1.
If that doesn’t change, the Democratic Party’s aspirations for November could soon be fulfilled in emptiness.
CNN’s Kevin Liptak, Daniella Diaz, Sarah Fortinsky and Lauren Fox contributed to this report.
Source: www.cnn.com
