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Tank discount in the USA: Joe Biden wants to request the suspension of gasoline tax due to inflation

2022-06-22T10:42:28.856Z

Because of the high gas prices, President Biden wants to call on Congress to waive gas taxes. Whether consumers would benefit from this is controversial - as in Germany.



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Gas station in the US: Prices are a "significant challenge" for many families

Photo: Jill Connelly / picture alliance/dpa/ZUMA Press Wire

The tank discount in Germany only brought consumers relief for a short time - because mineral oil companies are suspected of raking in the money.

Despite this risk, in the USA, in the fight against the increased fuel prices, consideration is now also being given to reducing taxes on petrol and diesel in the meantime.

US President Joe Biden even wants to ask Congress to suspend the tax for three months.

The White House said he understands that high gas prices are a "significant challenge" for American families.

That's why he will ask Congress to waive the tax from July to September.

The states should also suspend their taxes, it said.

Hope for discounts of up to a dollar a gallon

The federal tax is 18.4 cents on gasoline and 24.4 cents on diesel per gallon.

The national average price of gasoline is currently around $5 per gallon.

At the beginning of the year, before the Russian war of aggression against Ukraine, the price was just over three dollars a gallon.

States charge an average of about 30 cents in tax per gallon at the pump.

Biden is under a lot of pressure due to the persistently high inflation rate and, in particular, the historically high fuel prices by US standards.

Its Democrats want to defend their slim majority in both houses of parliament in the congressional elections in November.

The US president's past efforts to lower gasoline prices -- including releasing oil from the US strategic reserve and increasing the blending of ethanol this summer -- have resulted in little savings at the pump, a risk that also translates into conveys the idea of ​​a fuel tax exemption.

The White House said that if states join in suspending the tax on gasoline, and if oil companies and refiners also play their part, the price per gallon could be reduced by up to a dollar.

The suspension of the nationwide tax would therefore lead to a loss of revenue of around ten billion dollars.

Opponents of the proposal criticize that the suspension of the tax only has a limited effect and often only partially reaches consumers.

However, many economic experts from both major parties view the idea of ​​a tax exemption on fuel with skepticism.

Barack Obama dismissed the idea during the 2008 presidential campaign as a "gimmick" that would allow politicians "to say they did something."

He also warned that oil companies could offset the relief with price hikes.

The underlying problem is a lack of oil and refineries to produce fuel - a challenge that a tax exemption cannot necessarily solve.

There is little the President can do to influence prices, which are set by global markets, for-profit companies, demand and the dislocations caused by Russia's invasion of Ukraine and the ensuing embargo.

Apr/dpa/AP

Source: spiegel

All business articles on 2022-06-22

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