Biden Just Proposed a Gas Tax Holiday. Will It Work?
When President Biden proposed on Wednesday to suspend federal taxes on gasoline and diesel for three months, many Republicans rolled their eyes. And many Democrats wondered why it took him so long.
Variations on the concept have been bouncing from state to state for nearly a year now, with governors leading the way. Ron DeSantis Proposed To Cancel Florida’s Gas Tax back in november† Gavin Newsom has floated the new idea of handing out debit cards to Californians to offset rising prices. In March, Brian Kemp, arguably the most naked political move of all, suspended Georgia’s gas tax until May 31 — just days after his primary.
Four Democratic senators face tough reelection bids — Nevada’s Catherine Cortez Masto, New Hampshire’s Maggie Hassan, Arizona’s Mark Kelly and Georgia’s Raphael Warnock — sued in February for suspending federal gas tax† At the time, their political aides were eager to portray the Republicans as the bad guys.
That may be exactly what Biden now hopes to achieve: get Mitch McConnell, once the useful Senate defender, to reject his idea so that the White House can blame Republicans for resisting economic relief for ordinary Americans who have little to do. have money.
According to my colleagues Zolan Kanno-Youngs and Lydia DePillis, Biden used his speech on Wednesday to ask Congress to give Americans “a little bit of breathing room” by lifting federal taxes — about 18 cents per gallon of gasoline and 24 cents per liter. diesel — until the end of September, shortly before the fall midterm elections.
“I fully understand that the gas tax vacation alone will not solve the problem,” the president said. “But it will provide immediate relief to families.”
McConnell quickly dismissed the president’s call to suspend the tax as “stupid,” noting that many Senate Democrats were skeptical of the idea. But privately, several Republican strategists said they were concerned that McConnell was misinterpreting the moment.
Puzzle about long waiting
Policy makers tend to be critical of politically motivated tax relief gimmicks, arguing that they create the wrong kind of incentives.
Climate experts say the government should discourage, not subsidize, the use of fossil fuels. Prices are supposed to send a signal to the market, economists add, and tampering with them can cause unpredictable disruptions. Also, roads and highways are often financed and maintained through gas taxes, so the needed revenue has to come from elsewhere. There is no such thing as a free exit.
But politics is another matter. What is most puzzling to many Democratic and Republican strategists is why the White House has waited so long to try this particular gamble. A Republican agent said there was no real need for Nostradamus to find out.
A case study from Virginia
The lessons of not taking rising gas and grocery prices as a serious threat to Democrats’ political fortunes should have been driven home after last year’s big election: the Virginia governor’s race.
In July, when Glenn Youngkin, a former private equity executive and Republican candidate in the contest, complained on Twitter that Virginia gas taxes had risen 136 percent in recent years, Democrats in the state complained. mocked his comments as “dishonest, false, cynical, misleading, irresponsible and stupid on just about every level.”
Youngkin, who defeated Terry McAuliffe in the general election for governor that fall, added that the tax “makes it more expensive for Virginians to go to work, run errands, and visit loved ones.”
However, Youngkin later imposed a three-month suspension from Virginia’s gas tax of 26 cents a gallon he is still bickering with the state senatewhich is controlled by Democrats, on the proposed move.
And he held events at gas stations across the state, highlighting prices that now seem oddly low in retrospect.
McAuliffe mocked Youngkin’s several proposed tax cuts, which acted to: $3.2 billionas “crazy”.
But it turns out that tax cuts make for pretty good politics at a time when gasoline prices are even higher than they were then. A year ago, the average price of a gallon of gasoline in the US was $3.07, according to AAA. Today it is $4.96†
Democrats in Virginia now face a tricky dilemma: Will they stand behind their opposition to suspending the gas tax in their own state? Or do they turn off course and embrace Biden’s stance on the freezing of the federal gas tax? It is a difficult needle to thread.
Youngkin’s former ad creator, Will Ritter of the Poolhouse Strategies firm, expressed the conundrum of the Democrats in the new run of political campaigns: a meme with two panels from the rapper Drake, shared on Twitter.
In the top panel, with the Canadian rapper raising his hand dismissively, “Youngkin suggests a gas tax suspension.”
In the bottom panel, with a big grin from Drake: “Biden suggests a gas tax suspension.”
The Tom Leonard Effect
But the most politically effective move, Youngkin’s advisers say, was his proposal to eliminate the state 2.5 percent grocery tax†
The idea grew out of the campaign’s early skull sessions, when the top strategists tried to define the main themes of the race. They knew that if they focused on local issues and avoided the national ones that the McAuliffe campaign was eager to discuss, they would have a chance of overcoming the Democrats’ grassroots advantage of about 10 percentage points in the state.
To their surprise, internal polls showed that voters in Virginia were the most responsive to reports of a hypothetical proposal to repeal the grocery tax, an issue that was barely on the national radar.
It was a Eureka moment.
Youngkin’s team found Tom Leonard, a sympathetic grocery store owner, and got permission to run an ad in his wood panel shop in Henrico Countyin the suburbs northwest of Richmond.
It turned out to be the perfect backdrop for the down-home message Youngkin, whose net worth has been estimated at nearly $400 millionhoped to project.
Animated images placed on the scene showed prices on placards, written in Leonard’s folk font and immediately recognizable to locals, flipping down — presumably thanks to the intervention of the future governor.
Youngkin has used the store as a sound stage time and again, returning there this week for the ceremonial signing of his state budget when he hammered at Democrats for sticking to his tax cut agenda†
At the end of October, when Barack Obama visited Virginia Commonwealth University in Richmond tries to cancel McAuliffe’s candidacyYoungkin held his own rally in a field near Tom Leonard’s store, drawing a large crowd.
Then Youngkin’s advisers were sure, they said, that the race most likely belonged to them.
“You can’t run ads that tell me you’re an ordinary old man playing hoops, washing dishes and wearing fleece, but quietly cultivating support from those who want to tear down our democracy,” Obama told the audience in Richmond, referring to Donald Trump and other figures Youngkin kept at bay during the campaign.
As it turned out, Youngkin could do just that — and he did.
What to read?
Federal prosecutors and attorneys in the sedition case against the Proud Boys, the far-right group that helped lead the Jan. 6 attack on the Capitol, joined forces to request a stay of the trial, citing hearings by the House selection committee . The parallel investigations have “run into each other,” reports Alan Feuer.
Is there anything you think we’re missing? Something you want to see more of? We would love to hear from you. Email us at firstname.lastname@example.org†