Several states are trying to give drivers a break from high gas prices by temporarily suspending their gasoline taxes. And President Joe Biden is urging Congress to do the same by lifting the federal gas tax through September.
But consumers don’t receive the full benefit of gas tax holidays, according to a recent analysis by the nonpartisan Penn Wharton Budget Model, which looked at suspensions in three states through mid-May. Instead, they have to share the savings with gas suppliers, which capture part of the economic benefit if pump prices don’t fall by the full amount of the suspended tax.
The report quantifies some of
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