Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

U.S. states float tax breaks to ease pain at the gas pump

Economic Indicators Mar 10, 2022 05:11PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. FILE PHOTO: Gasoline prices are displayed at a gas station, following Russia's invasion of Ukraine, in Jersey City, New Jersey, U.S., March 9, 2022. REUTERS/Mike Segar/File Photo 2/2

By Rich McKay and Sharon Bernstein

(Reuters) - A surge in U.S. retail gasoline prices to record highs has prompted governors and lawmakers in several states to consider slashing their fuel taxes and to ramp up pressure on the federal government to do the same.

The push reflects worries in state governments that the rapid spike in fuel costs could hurt motorists and chill local economies, and that federal efforts to keep prices down so far have been insufficient.

"Today I am announcing that, at this time of global uncertainty, we are working on an emergency suspension of the gas tax to help with the pain at the pump," Maryland Governor Larry Hogan, a Republican, said on Thursday in a Tweet. The state has a 36.9 cent per gallon gas tax.

Georgia Governor Brian Kemp, a Republican, said earlier this week he was working with legislators to suspend the state's roughly 29 cent per gallon tax, citing "a total failure of leadership in Washington" to curb fuel prices.

Governors and lawmakers in California, Florida, Maine, Michigan, New York, Tennessee and elsewhere are making similar moves. Meanwhile, a coalition of six Democratic governors – from Colorado, Michigan, Minnesota, Pennsylvania, New Mexico, and Wisconsin – sent a letter this week to U.S. congressional leaders, asking them to support a bill to lift the nation’s 18.4 cent per gallon federal tax.

“Money saved at the pump translates into dollars back in consumers’ pockets for groceries, childcare, rent, and more,” they wrote.

U.S. consumer prices surged in February, culminating in the largest annual increase in 40 years, and inflation is poised to accelerate further in the months ahead.

Pump prices struck $4.38 on average nationwide on Thursday, according to motorist group AAA, driven in part by rising global demand and the disruption of Russian oil supplies since Moscow’s invasion of Ukraine.

The administration of U.S. President Joe Biden, which announced a ban on Russian oil imports this week, has attempted to curb rising consumer energy prices by orchestrating the release of crude oil stockpiles from emergency reserves in concert with other consumer nations.

The White House has said it is studying additional moves to blunt the impact on U.S. fuel consumers, and administration officials have called on domestic and foreign energy producers to drill more oil quickly to stabilize the market.

Taxes, however, make up a significant chunk of prices at the pumps. They include the 18.4 cent federal gas tax, along with state and local levies that can vary broadly from below 10 cents to nearly 60 cents per gallon.

State and local governments collected a combined $52 billion in revenue from motor fuel taxes in 2019, according to the Urban Institute. Most of that money is diverted to transportation spending, including for road, bus and metro systems.

Florida lawmakers agreed on Wednesday to suspend the state's roughly 27-cent gasoline tax starting in October.

Michigan's legislature, meanwhile, announced its plans to vote on a six-month suspension of the state's 27.2 cent a gallon fuel tax. Michigan's Senate Majority leader Mike Shirkey, a Republican, estimated that the move would save drivers about $750 million.

In New York, state lawmakers from both parties are calling for a suspension of the state's 48 cent per gallon gas tax. Governor Kathy Hochul said Monday she is speaking with her budget office about the potential budget impact.

California Governor Gavin Newsom, a Democrat, meanwhile, said Tuesday that his administration was developing a proposal to offer Californians a tax rebate to help cover the rising costs of fuel.

U.S. states float tax breaks to ease pain at the gas pump

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Me comment
Me comment Mar 10, 2022 9:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why don't the governments go after the companies and distributors and retailers for the insane price gouging they are doing. The oil currently being refined for gas and distillates was baught long before the current spike in oil prices. Based on those prices gas should be about $2.49 a gallon before adding the fed and state gas taxes. Just goes to show how big oil controls the government.
Lucas P
Lucas P Mar 10, 2022 7:10PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
A rebate? How in heck are you going to distribute that. Give to the shopping cart homeless? Just take it off at the pump where it's paid on the first place. Real simple.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email