President Donald Trump has endorsed the idea of suspending federal taxes on gasoline in an effort to combat skyrocketing gas prices sparked by his unpopular war against Iran, but CNN’s Matt Egan, looking at a new analysis from the University of Pennsylvania, broke down on Monday exactly why the president’s idea was nothing more than a “gimmick.”
“It’s already been such a financial nightmare for Main Street, and a political nightmare for the White House, but other than the obvious – getting the Strait of Hormuz re-opened – they’re really kind of running out of options to prevent gasoline from blowing past those Biden-era records above $5,” Egan said.
“They’ve already taken a whole bunch of ‘break-the-glass’ steps, including tapping the Strategic Petroleum Reserve (SPR), releasing record amounts of oil from the SPR, they’ve waived the Jones Act, revoked the Defense Production Act, declared a national emergency. And yet, gas prices remain historically high.”
Trump’s decision to authorize strikes against Iran was met with the immediate partial closure of the Strait of Hormuz, a critical shipping waterway through which a fifth of the world’s oil trade flows. In the months since, gas prices in the United States have soared, and are “on track” to reach an average of $5 per gallon by Memorial Day.
“Anytime gas prices are high, there’s always talk about suspending the federal gas tax, but this would save you shockingly little,” Egan said.
Using data from the Penn Wharton Budget Model out of the University of Pennsylvania, Egan explained exactly how much Americans might save should Trump suspend federal taxes on gas.
“They project that even if you put a 122-day pause on the gas tax, and even if you drive a lot and you’re filling up your gas tank once per week, you would only see $35 – not per week, not per month, total, $35 would be the total savings from the gas tax holiday!” Egan said. “Meanwhile, it would starve the Highway Trust Fund over $11 billion. So no wonder a lot of people call this a gimmick.”
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