Suspending Gas Tax Creates New Subsidy for Big Oil
WASHINGTON, D.C. — President Joe Biden today called on Congress to suspend the federal gas tax for three months in an effort to alleviate high prices at the pump.
Robert Weissman, president of Public Citizen, issued the following statement:
“Suspending the gas tax is the wrong answer to the problem of high prices at the pump. The right answer is a windfall profits tax on Big Oil.
“Pumping the brakes on the gas tax may fail to lower prices, and may instead enable Big Oil companies to increase their profits even further. The gas tax suspension would go unnoticed by consumers and would likely be renewed long into the future. The nation needs the revenue from federal gas taxes, which pay not just for highways and bridges, but also mass transit.
“Global oil prices remain above $100 per barrel primarily because of the Ukraine war and pent-up demand for travel in cars and airplanes during the summer travel season. But while the world price per barrel remains elevated, the cost of production is not. As a result, integrated Big Oil companies are generating staggering profits. The best solution would be to impose windfall profits legislation that taxes those excess profits and sends revenue directly back to Americans.
“Another upward pressure on domestic prices is the surge in oil exports, which traces to the misguided removal of the U.S. oil export ban in 2015. With exports surging, even increasing production and refining in the U.S. – options that cannot be implemented quickly — will not necessarily expand U.S. supply. Reimposing the ban on exports would drive prices down.
“As important as immediate steps are to address the pain that consumers feel at the pump, we must move much more aggressively to transition to a fossil fuel-free future. That’s imperative to avert climate chaos. It’s the means to eliminate Big Oil’s vice grip over our economy and politics. And it will dramatically lower energy prices, including to power our transit.”