Peach Tree Times

As inflation has remained at a 40-year high for the past several months, high gas prices are a major concern for many Americans. 

To ease the concerns about gas prices, many Democratic governors have tried to suspend their state's federal gas taxes. Experts do not agree with this course and claim that it is a short-term solution that could create bigger problems in the long run.

Maya MacGuineas, opinion contributor for The Hill and president of the bipartisan Committee for a Responsible Federal Budget, emphasized the dangers of a federal gas tax suspension. Among risk factors, she claims a gas tax suspension would worsen the climate crisis and slow the development and adoption of cleaner technologies.

"A gas tax holiday would exacerbate inflationary pressures and slow a needed transition to more energy-efficient and climate-friendly technologies, while cutting off a key source of infrastructure funding" Maya said. "It’s a way for politicians to pretend they are making the situation better, when in fact they are making it worse."

She was also concerned about revenue.

"Committee for a Responsible Federal Budget estimates that suspending the gas tax through the end of the year would reduce that revenue by roughly $20 billion, nearly halving the trust fund’s revenue for the year" MacGuineas said. 

She was also concerned by how these plans could alter the demand for gas. 

"Rather than countering the highest inflation rates seen in decades, suspending the gas tax in an overstimulated economy would boost inflation in 2023, as surging demand coincides with re-imposition of the tax" she said. "Remember, it was excessive tax cuts and spending that helped get us into this inflation mess; they aren’t going to get us out of it."

Conversely, some Georgia representatives support such policies.

"The Senate must pass my Gas Prices Relief Act" Sen. Raphael Warnock said. "We can make prices cheaper while holding corporations accountable."

According to CNET, gas taxes do not keep up with increasing infrastructure costs, a problem made worse by the increasing use of electric vehicles. Some economists warn that a gas tax holiday would make the problem worse and would not deal with problems pertaining to the oil supply. The current federal fuel tax rates are $0.184 per gallon for gasoline and $0.244 per gallon for diesel. In Georgia, the current gasoline tax is $0.291 per gallon.

CNET reports that Georgia's General Assembly voted unanimously to pause state fuel taxes until May 31, removing 29.1 cents a gallon from the price of gasoline and 32.6 cents per gallon off diesel over a stretch of 10 weeks. The gas tax holiday is intended to save drivers over $300 million, according to Gov. Brian Kemp. Kemp also says that lost revenue will be made up by state surplus funds.

According to Congress.gov, The Gas Prices Relief Act of 2022 was proposed in the House on March 31. It is a bill that bans federal agencies from finalizing any regulations that would cause (1) a decrease in domestic oil, gas, or biofuels production; (2) an increase in gasoline prices; or (3) any negative effects on domestic energy production, domestic electricity generation, transmission of fuel or electricity, infrastructure development, or transportation fuels. The prohibition may not end until the earlier of Jan. 1, 2023, or until the average gasoline price is $2.60 per gallon or less.