President Biden is calling on congress to suspend the federal gas tax. It would be a three month moratorium on the 18 cent fee.
“It is not clear that this is a sound policy decision,” said Nikolaos Zirogiannis, professor of environmental economics policy at Indiana University. “Whether we like it or not, this high price actually helps the market manage that scarcity. By artificially lowering the price and giving people the incentive to actually purchase more gasoline, we are preventing the market from manifesting that signal.”
Biden is also asking state governments to provide more support such as suspension of state gas taxes. Some state representatives think that suspension is necessary to provide rapid, immediate relief.
In Indiana, support might come in an extra $225 for taxpayers. Governor Eric Holcomb proposed the payment from the state’s budget surplus instead of suspending the state gas tax. He says It’s intended to be a form of relief broader than suspending the tax.
Holcomb will hold a special session on July 6th to propose the $1 billion dollar deal. He said it’s the “fastest, fairest, and most efficient way” to aid taxpayers during the economic strain.
