With gas prices topping $4 per gallon at the pump (AAA reports that the national average is $4.108 as of today), drivers are increasingly focused on higher prices. So are some members of Congress. Congressman Brendan F. Boyle (D-PA) thinks he has a solution: Lower the federal gas tax.

The federal gas tax currently stands at 18.4 cents per gallon (24.3 cents per gallon for diesel), a rate that hasn't changed since 1993.

Boyle, the Ranking Member of the House Budget Committee and a member of the Ways and Means Committee, which has jurisdiction over federal tax policy, would change that—sort of. He has introduced the Gas Price Relief Act, which would suspend the current federal gas tax whenever the national average price of gas exceeds $4 per gallon, reducing or eliminating the tax depending on how high prices rise to provide immediate relief at the pump.

To avoid a funding gap in the Highway Trust Fund, Boyle’s proposal would offset the lost revenue by redirecting roughly $30 billion in existing federal subsidies currently going to oil and gas companies—including those as a result of the One Big Beautiful Bill Act (OBBBA)—into the fund.

The proposal is new, but Boyle is optimistic. When asked whether his Republican colleagues, who hold a majority in the House, might support it, Boyle said, “Well, I don't think the oil and gas companies that they tend to serve would be entirely enthusiastic, but here is a time, especially when they're facing what looks like a difficult re-election, that they could deliver a real tax [break] to working Americans, I am hopeful that you will see some Republicans join my effort.”

In addition to federal gas taxes, most states impose their own gas taxes.

According to data from the Tax Foundation, the highest gas tax in the country can be found in California at 70.9 cents per gallon, followed by Illinois (66.4 cents per gallon) and Washington (59.0 cents per gallon). The lowest gas tax rates can be found in Alaska (8.95 cents per gallon), Hawaii (18.5 cents per gallon), and New Mexico (18.9 cents per gallon).

(Those figures don’t include certain gross receipts taxes, some local taxes, or special programs such as cap-and-trade carbon policies or low-carbon fuel standards.)

Since state gas taxes in most states are higher than the federal gas tax, a number of states are also weighing temporary gas holidays as fuel prices rise.

Some have already acted. Georgia’s Governor Brian Kemp signed HB 1199, which immediately suspended the state's motor fuel excise tax (roughly $0.33 per gallon) through May 19, 2026, while Indiana Governor Mike Braun has signed an executive order suspending the state’s 7% sales tax on gasoline until May 8, 2026. And Utah Governor Spencer Cox has signed a bill reducing the state gas tax by 15% starting July 1, 2026, through the end of the year.

Other states, such as Pennsylvania, Illinois, and Connecticut, are considering similar measures through legislation or executive action. On April 14, Texas Agriculture Commissioner Sid Miller publicly called on Governor Abbott to use the state’s "Rainy Day Fund" to immediately suspend the motor fuel tax.

A few states are holdouts, including New York, where Governor Kathy Hochul has cited the state’s 2022 holiday as evidence that these pauses have limited long-term impact on what people pay at the pump. Maryland Governor Wes Moore has resisted calls for a pause, noting that even a 30-day suspension would create a $100 million hole in the state's transportation budget.

In Florida, Governor Ron DeSantis, who supported a gas tax pause in 2022, has pushed back now, saying, “Our ability to influence fuel prices are really marginal.” He added, “Sometimes the prices get raised so the consumer doesn’t see any difference. If the gas is $4 a gallon, whether you are paying tax or not, if you are paying $4 that’s what people notice, right? And I think when we did it in the past … I don’t think the consumer really felt relief.”

How State Gas Taxes Work

Most of the time, you don’t think about the specific state taxes at the pump because, outside of states like Oregon that require service stations to display the taxes, you tend to focus on the price per gallon.

And, unlike federal taxes, state taxes aren’t necessarily “added” to your receipt. For tax purposes, the retail owner pays state gas tax when they buy the gasoline for resale—that's when the gas goes into the pump. That tax is passed along to consumers in the state as part of the per-gallon price—it's not a separate tax.

The History Of Federal Gas Taxes

States have relied on gas taxes for far longer than the federal government. President Herbert Hoover signed the Revenue Act of 1932, authorizing the first federal gasoline tax. While it was the first federal gas tax, but not the first gas tax in the country since every state at the time had its own gas tax.

The first federal gas tax was a whopping one cent per gallon (23 cents in today’s dollars), while the average cost of gas in 1932 was ten cents per gallon ($2.31 in today’s dollars). It was not originally earmarked for highways or road projects but was intended to help close a gap in the general fund caused by the depressed economy. It worked. The government raised millions of dollars from the gas tax in the first year, so much so that it was the most lucrative of all the excise taxes, raising as much as the next 18 excise taxes put together. With that, the government did exactly what you’d expect: it raised the gas tax again the next year. The tax increased to 1.5 cents per gallon as part of the National Industrial Recovery Act of 1933.

The tax wasn’t very popular, and it became even less so as the economy remained flat. While other countries were seeing an uptick after a worldwide depression, conditions in the U.S. were not improving. Unemployment reached 25%. Loans were in default. Banks were failing. So, with the Revenue Act of 1934, Congress rolled back the gas tax to its original rate of 1 cent per gallon to provide some relief. But working Americans picked up the difference: individual income tax rates increased, with the top rate at a remarkable 63%.

By 1940, the U.S. economy was in full recovery mode, but the government had not made up the shortfall. That year, Congress raised the gas tax back to 1.5 cents per gallon. As the country rolled into World War II, anticipated war costs fueled economic fears, and the gas tax was made permanent in 1941 to help keep the lights on.

When the Korean War began in June 1951, it was easy to look to the gas tax to boost revenues quickly, and the Revenue Act of 1951 raised the gas tax to two cents per gallon. The idea was to repeal the increase after the war was paid for, but that didn't happen.

The mid-1950s also marked a new love affair with cars and highways in America. It was clear that highways would continue to be built, and it was even clearer that the government did not have the funds to throw at new roads. With the Highway Revenue Act of 1956, the gas tax increased from two to three cents per gallon. This time, however, Secretary of the Treasury George Humphrey suggested that, rather than lumping the gas tax revenue into the general fund, it be diverted to a highway trust fund to pay for roads and maintenance. The trust fund, modeled after the Social Security trust fund, remains in place to this day.

But with an ambitious highway-building program in the works, influenced by the German autobahn system (Secretary of Commerce Sinclair Weeks called it "the greatest public works program in the history of the world”), the U.S. faced a spending problem. With his signature project on the line, President Eisenhower signed another "temporary" increase in the gas tax in 1959, bringing the total to four cents per gallon. That "temporary" increase would last for 24 years.

In 1982, President Ronald Reagan signed into law the largest increase in the gas tax in its fifty-year history, raising the tax to nine cents per gallon. Taxpayers didn’t feel the pain at the pump too badly, since at the time the law took effect in 1983, gas prices were near historic lows, with some reporting gas at less than $1 per gallon. President Reagan would top up the gas tax one last time before he left office, signing a 0.1-cent increase into law to help pay for the cleanup of leaking underground storage tanks, bringing the tax to 9.1 cents in 1987. That increase would fall away by 1990, dropping the gas tax back to nine cents per gallon.

As part of the 1990 Omnibus Budget Reconciliation Act, the gas tax was increased by another five cents, bringing the total to 14 cents per gallon. Within a ten-year span, the gas tax had increased under Presidents Reagan and Bush by ten cents per gallon, a 350% increase.

The gas tax was also no longer a dedicated tax. The additional revenue was no longer going to highway and road projects. Half of the increase in the gas tax under OBRA was earmarked for deficit reduction, a key concern in the 1990s.

In 1993 there was yet another Omnibus Budget Reconciliation Act, another President (Bill Clinton), and yet another increase in the gas tax. The gas tax was further increased by 4.3 cents, with the entire increase targeted at reducing the federal deficit.

Four years later, as part of the Taxpayer Relief Act of 1997, President Clinton reversed course, earmarking the gas tax increase back to the Highway Trust Fund. That same year, the .1 increase to help pay for leaking underground storage tanks, which had been allowed to expire, was reinstated.

The federal gas tax has remained steady at 18.4 cents per gallon for the last 16 years. There have been a number of calls to change the tax over the years. Most proposals affecting the gas tax suggest eliminating it entirely.

Prices Will Likely Remain High

For now, it doesn’t look like there’s any relief in sight. According to Boyle, the recent boost in gas prices reflects the largest monthly increase in six decades.

So, what’s going on? For one, there has been a major disruption tied to conflict involving Iran, including issues around the Strait of Hormuz, one of the world’s main oil highways. Currently, the U.S. Navy, under President Trump’s orders, is blockading the waterway, with the military confirming that "U.S. forces have completely halted economic trade going into and out of Iran by sea.” Even if there’s a pause in the conflict, the supply won’t bounce back overnight.

That comes just as we’re making a seasonal switch. Every spring, we switch to summer-blend gasoline, which has lower volatility to prevent excessive evaporation in the heat. It’s more expensive to produce, and that extra cost is typically passed along to consumers.

The bottom line? With or without a change in the federal gas tax, don’t expect a drop in gas prices any time soon.

© Forbes