Biden considering gas tax holiday, analysts raise concerns
KANSAS CITY, Ks. (KCTV/AP) - President Joe Biden signaled he’s considering a federal gas tax holiday after several lawmakers floated the idea, potentially saving motorists 18.4 cents per gallon.
On Monday, he told reporters he expected to have a decision by the end of the week.
KCTV5 wanted to know how much money you’d save if it passed. A petroleum analyst estimated the savings at less than $5 per week and warned it could come with unintended negative consequences.
Shari Bonner watched as the total on the gas tank ticked up on Monday in KCK. The prices have been a real squeeze.
“It’s going come down to food or fuel on the car,” she said.
Carey Pouncil said she has no choice when it comes to filling up. She lives in Roeland Park, manages a doctor’s office in Olathe and works a side job delivering with Door Dash. That’s a lot of driving.
“You have to have gas to get back and forth to work,” she remarked.
That’s why the idea of a gas tax holiday has appeal.
“I think any idea to help a gallon of gas come down is worthwhile,” said Bob Myers, who lives in Fairway.
But some industry analysts say it could inadvertently push prices higher by raising demand.
“I’m against it as an analyst as it may cause demand to go up, exacerbating the imbalances that have led to such high gas prices in the first place,” wrote GasBuddy Head of Petroleum Analysis Patrick De Haan in an email to KCTV5.
De Haan crunched the numbers based on current prices and average use. He estimates possible savings from $2 to $5.50 per week depending on the type of vehicle driven.
The federal gasoline tax is used to fund road improvements at the federal and state level. That’s why AAA says it is opposed to a gas tax holiday.
“That would create a funding gap for some of those roadway improvement and roadway safety projects,” said AAA Missouri Public Affairs Specialist Nick Chabarria. “That could mean you know, putting off road repairs or pothole repairs, and in the end, you know, could cost drivers more from damage to their vehicle that you know, just one example of how that might trickle down.”
Still, some local motorists contend the gesture itself has value.
“It’ll make us feel better that somebody’s doing something,” argued Myers.
Several state gas tax holidays have shown net savings for consumers. The Penn Wharton Budget Model released estimates Wednesday showing that consumers saved at the pump because of gas tax holidays in Connecticut, Georgia and Maryland. The majority of the savings went to consumers, instead of service stations and others in the energy sector.
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