US senators propose gasoline tax holiday

Four US senators said Wednesday that they would push for approval of a bill that would suspend the 18.4�/gal federal gasoline tax for 150 days, through the Thanksgiving Holiday travel weekend. Filing the bill were Sens. Kay Bailey Hutchison (R-Tex.), Spencer Abraham (R-Mich.), Peter Fitzgerald (R-Ill.), and Rod Grams (R-Minn.).


Washington, DC�Four US senators said Wednesday that they would push for approval of a bill that would suspend the 18.4�/gal federal gasoline tax for 150 days, through the Thanksgiving Holiday travel weekend. Filing the bill were Sens. Kay Bailey Hutchison (R-Tex.), Spencer Abraham (R-Mich.), Peter Fitzgerald (R-Ill.), and Rod Grams (R-Minn.).

Hutchison said the measure would cost $1.5 to $1.8 billion/month, depending on the level of gasoline usage, or around $7-8 billion. The bill also would apply to diesel fuel and kerosine taxes.

Since the fuels taxes are earmarked for the federal Highway Trust Fund, Hutchison said Congress would reimburse the trust fund from general revenues.

The senators said they expected the cooperation of Senate Majority Leader Trent Lott (R-Miss.) for their bill, since Lott earlier led a failed attempt to repeal 4.3�/gal of the gasoline excise tax.

Hutchison said, �Until we get a long-term solution to stabilize oil and gas prices, we can give drivers a break during the peak summertime driving months, while assuring that federal funds for highway construction projects continue to flow.�

Abraham said, if Congress does not act, consumers will drastically reduce their purchases of higher-priced gasoline, and �the reduced gas demand would affect the tax anyway."

Fitzgerald said, �This is the only direct instrument the federal government has to lower prices at the pump.�

Separately, Sen. Frank Murkowski (R-Alas.) filed a bill that would allow individuals and families to deduct federal, state, and local gasoline taxes for the rest of the year from their 2000 federal income taxes. He said the measure would amount to nearly a $200 rebate for families in western states.

Sens. Abraham and Ben Nighthorse Campbell (R-Colo.) cosponsored the bill.

Murkowski noted that, until 1978, taxpayers who itemized deductions could deduct their gasoline taxes.

More in Economics & Markets