Trump floats gas tax suspension as Iran war hits Americans' wallets - National & International News -

Trump floats gas tax suspension as Americans face Iran war’s financial impacts

President Trump says he would like to temporarily reduce or suspend the federal gas tax as prices soar due to the Iran conflict. Since the war began on February 28, gas prices have risen about 50% with a current nationwide average of $4.52 per gallon of gas and $5.63 per gallon of diesel. The federal tax is currently 18.4 cents per gallon of gas and 24.4 cents per gallon of diesel. Suspending this tax would not provide a significant amount of relief for consumers. Even Trump acknowledged, “It’s a small percentage, but it’s, you know, it’s still money”.

It would take an act of Congress to reduce or suspend the gas tax even temporarily. Trump said he would like to keep the suspension in place “until it’s appropriate”. He insisted that “as soon as this is over with Iran, as soon as it’s over, you’re going to see gasoline and oil drop like a rock,” but market and energy experts do not agree with his prediction.

The ending of the Iran war is increasingly uncertain. Trump said today that the current (if theoretical) ceasefire with Iran is on “life support” after deeming Iran’s latest peace proposal “TOTALLY UNACCEPTABLE“.

War’s worst financial impacts yet to come

Even if the war were to end today, Americans and the rest of the world will be feeling its effects for months if not years into the future. Americans are increasingly aware of the war’s impact on their finances, placing even greater political pressure on Trump.

An NPR/PBS Marist poll shows that 8 in 10 Americans are feeling financially strained by high gas prices. Another ABC News/Ipsos poll found about half of Americans expect gas prices to continue rising over the next year. Furthermore, 40% of Americans say they are not as well off as they were when Trump returned to the White House last year and 61% say it was a mistake for the US to use military force against Iran.

While prices at the pump are the most immediate financial impact most consumers will notice, the Iran war will bring many other financial pressures. Fuel prices, especially diesel prices, also affect the costs of most consumer goods. Additionally, about one-third of the world’s fertilizer imports also comes through the Strait of Hormuz. Even the temporary disruption of this transport will impact fertilizer prices and ultimately food prices in the US and across the world.

How much money would you save in your state if the federal gas tax was lifted?