The prospect of suspending federal gas taxes has moved from campaign talk to serious policy discussion as prices creep toward $5 per gallon nationwide. President Trump told reporters Monday he intends to suspend the 18 cents per gallon federal gas tax, though such a move would require congressional approval.
Energy Secretary Chris Wright signaled the administration's openness to the idea during a Sunday appearance on NBC News, saying the Cabinet supports "all measures that can be taken to lower the price at the pump." Georgia already took unilateral action in March, suspending its own state gas tax, though that relief is set to expire May 19.
An analysis of the current tax structure reveals how much motorists are already paying in state and federal levies. An average of 51 cents per gallon in combined taxes and fees is added to every gallon of regular gas sold in America. The federal government collects about 18 cents, while states keep the remainder. Across all states, these taxes and fees account for 11.5% of the final price per gallon.
The burden varies dramatically by location. Alaska's gas tax is minimal, adding just 5% to the per-gallon price. Illinois residents face the steepest burden, with state and federal taxes comprising 17% of what they pay. Individual state gas tax rates range from 27 cents per gallon in Alaska to 89 cents in California, not including local taxes that some jurisdictions impose on top.
Even if all these taxes disappeared overnight, pump prices would remain substantially elevated. An NBC News analysis found that suspending every state and federal gas tax would only bring prices down to levels still 35% higher than they were before late February. Gas prices nationally have jumped more than 50% since that period.
Democrats in Congress beat the administration to the idea, proposing gas tax suspension measures in March. The timing underscores how the issue has become a bipartisan concern as voters feel the squeeze at fill-up stations.
The federal gas tax has been frozen since 1993, when President Bill Clinton signed the last increase into law. In inflation-adjusted terms, that 18 cents per gallon would be worth only about 8 cents in 2026 dollars, meaning the tax's real purchasing power has eroded significantly over three decades.
Any suspension comes with real fiscal consequences. Estimates suggest a federal gas tax holiday would cost the government at least $2.5 billion per month in lost revenue. Much of that money normally flows into the Highway Trust Fund, which finances highway construction and maintenance projects as well as mass transit initiatives nationwide.
Author Sarah Mitchell: "Suspending the gas tax makes for good politics but fails to address the core problem driving prices higher, and it would starve infrastructure funding at a moment when roads need serious investment."
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