ASA Calls Upon Congress Not to Suspend the Federal Gasoline Tax

ASA, along with the Transportation Construction Coalition (TCC), called upon congressional leadership to not suspend the federal gasoline tax in the name of “economic relief,” which is misguided and could undermine the recently enacted and bipartisan Infrastructure Investment and Jobs Act (IIJA). Per their letter, “we strongly oppose the S. 3609, the Gas Price Relief Act of 2022. Federal highway and public transportation programs are funded primarily with taxes on gasoline and diesel fuel, founded on a “user pays” model, where those who use transportation systems pay for them. The TCC strongly supports these user fees.”

Proponents of the gasoline tax holiday, as proposed in S. 3609, suggest it would lower prices for consumers. However, the view that federal fuel taxes have a discernible impact on prices at the pump misses the mark. The federal gasoline tax has not been increased since 1993, when gasoline was around $1.00 per gallon nationally. Meanwhile, gasoline prices have increased roughly 250 percent, which indicates other factors, like supply and demand, input costs, and geopolitics are drivers of price fluctuations--not federal fuel taxes. A gasoline tax holiday would have little meaningful impact on fuel prices, would further erode the user-pays system, and make it harder to repair America’s aging infrastructure. The IIJA provides resources to rebuild American infrastructure for the 21stcentury and provide the short and long-term economic benefits that will make a real difference for American families, rather than temporary political gimmicks. The IIJA will make important improvements to connect communities, prioritize resiliency, save lives, and facilitate economic growth and competitiveness. Disrupting the carefully negotiated revenue structure in the IIJA would jeopardize these benefits.