Yesterday, as widely expected, President Biden called on Congress to implement a three month suspension of the federal gasoline tax.

Observers of all stripes have argued that the move is unlikely to offer consumers much relief, and could even be counterproductive. Economists have suggested that suspending the 18 cent per gallon tax could modestly stimulate gasoline demand at a time of constrained supply, providing a boost to consumption and padding oil company profits. Climate policy advocates worry about the carbon emissions impact of subsidizing consumption. And given the role of the gas tax in supporting the federal Highway Trust Fund, others are raising red flags about starving infrastructure investment of much needed revenue.

Still, it’s understandable that policymakers feel compelled to take action as U.S. gasoline prices soar to record highs, threatening the broader economic recovery. It now seems quite possible that the average household will spend an extra $1,000 or more on fuel compared to 2019 spending levels, and policymakers do not have a ton of good options for addressing the rise.

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