Trump proposes gas tax holiday, but savings may be limited

A move by the Trump administration to suspend the federal gasoline tax would offer only modest relief to U.S. drivers socked by soaring fuel costs, according to tax and energy experts. Americans face the highest prices at the pump since 2022, with a gallon of gas surging roughly $1.54 since the U.S. and Israel attacked Iran in late February. On Monday, drivers nationwide paid an average of $4.52 a gallon, according to AAA. "I think it's a great idea," President Trump told CBS News White House correspondent Nancy Cordes on Monday of the plan to temporarily lift the gas tax. "Yup, we're going to take off the gas tax for a period of time, and when gas goes down, we'll let it phase back in," How much is the federal gas tax per gallon? Suspending the gas tax would likely provide only limited relief, as recent price increases have far outpaced the federal levy. The federal government charges 18.4 cents per gallon on gas and 24.4 cents per gallon on diesel, with the revenue funding the Highway Trust Fund. Suspending the tax would reduce the current price of regular gas to $4.34 per gallon and diesel to $5.39 per gallon. That would return prices to roughly early May levels, when gasoline costs were still about 46% higher than before the Iran war. "The irony of a gas tax suspension is that the higher prices go, the less of an impact it has," Andrew Lautz, director of tax policy at the nonpartisan Bipartisan Policy Center, said Monday in a social media post. …