The White House wants to eliminate a federal tax of 18 cents per gallon (3.78 liters) until September and ask the states, which also tax gasoline at the pump, to do the same in order to “directly relieve American consumers suffering from (Vladimir) Putin’s rise in prices”indicated senior officials of the Biden administration, reiterating the Executive’s accusation against the Russian president to explain the price increase.
The average price of a gallon of gasoline reached a record level of 5 dollars, compared to about 3 dollars a year ago.
The uptick is having an impact on the US economy, dragging President Biden’s approval rating below 40%.
“The president is aware of the significant challenge high gas prices pose to working families,” as gasoline costs “increased dramatically around the world, by nearly $2 a gallon since Putin massed his troops in the Ukraine’s borders,” the officials said.
Biden “understands that this suspension of the gasoline tax is not going to offset by itself the increased costs that we are seeing“, they admitted.
“But he believes that at this unique time when the war in Ukraine imposes costs on American families, Congress must do what it can to relieve those families,” they added.
Suspension of this 18-cent federal tax, along with the 24-cent-per-gallon diesel tax during the summer travel season, would cost an estimated $10 billion to the highway infrastructure fund normally funded by these levies.
The Biden administration assures that other income can compensate for that income cut.
Likewise, the White House asks states to temporarily abolish their taxes or provide compensation mechanisms to motorists.
Several states have already done so, such as Connecticut and New York. On averagestates charge 30 cents in taxes per gallon of gasoline.
But according to analysts, some 46 states have yet to act, including Californiawhere gasoline is the most taxed and the most expensive, exceeding 6 dollars per gallon.
For analysts, Biden is taking a political risk by trying to suspend taxes, a measure criticized before it was known that he would propose it, even from his own party.
The Democratic Majority Leader in the House of Representatives, Nancy Pelosirejected last week the idea that, according to her, is “show”.
Some experts also expressed skepticism about the effect of the measure, which does not address the underlying problem: strong demand versus restricted supply.
Source: Ambito
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