Trump Proposes Suspending Federal Gas Tax for Temporary Relief

The Trump administration's plan to suspend the federal gasoline tax would deliver only modest relief to drivers facing record-high fuel prices, tax and energy experts said.

Gas prices have hit their highest levels since 2022, jumping roughly $1.54 per gallon since the U.S. and Israel attacked Iran in late February. Drivers paid an average of $4.52 a gallon nationwide on Monday, according to AAA.

"I think it's a great idea," President Trump told CBS News White House correspondent Nancy Cordes on Monday. "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."

The federal tax stands at 18.4 cents per gallon on gasoline and 24.4 cents on diesel. Revenue from the levy supports the Highway Trust Fund.

A suspension would drop regular gas to $4.34 a gallon and diesel to $5.39, returning prices to roughly early May levels. Even then, gasoline costs would remain about 46 percent 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. "For a sedan at national average prices, filling up your car costs $18-$25 more than it did before the war. A federal gas tax holiday saves you up $2 per fillup."

Lautz created a tax calculator for consumers to estimate savings. A California driver with an SUV, for instance, could save $2.36 to $3.09 per fill-up. That driver would still pay $24 to $32 more per tank compared with before the war.

Any suspension requires congressional approval because the tax falls under federal law. That faces steep odds amid partisan divides in Washington and midterm elections on the horizon.

The move would also sap the Highway Trust Fund. GasBuddy analyst Patrick De Haan estimated a monthly revenue loss of about $2.1 billion.

Some states have already waived their own fuel taxes. Georgia, Indiana and Utah took such steps. State taxes range from 15 cents to about 60 cents per gallon, offering more substantial relief than the federal tax, experts noted.

"Indiana is seeing huge gas price drops thanks to the state waiving the use tax and excise tax — motorists getting a nearly 60c/gal discount with prices falling below $4 at some stations," De Haan wrote in a May 10 social media post.