Trump calls gas tax pause ‘a great idea’ but experts warn savings may be minimal. Why these 3 alternatives could have a bigger impact

The federal gas tax amounts to 18.4 cents a gallon for gasoline and 24.4 cents a gallon for diesel (4). Suspending it, however, is easier said than done.

Only Congress can authorize a suspension — a step it's never taken in the tax's 94-year history. That said, the issue currently enjoys rare bipartisan consensus, with Democrat Congressman Chris Pappas, who authored legislation to suspend the gas tax in March (5), responding to Trump's comments on Monday by urging, "Let's pass it this week" (6).

Still, many experts argue that cutting the federal gas tax wouldn't provide substantial relief to consumers, and that alternative ideas could boast more mileage in the long run.

Why (temporarily) axing the gas tax won't save you much money

While pausing the federal gas tax seems like a relief for drivers, experts warn of two major bumps on that road.

First, a new Penn Wharton model showed that, when pausing the gas tax from June to October, consumers would only reap roughly 60% to 72% of the tax savings, with the rest going to suppliers (7).

That, they say, is just over 13 cents per gallon — or a savings of about $35 per household for that four month period.

A study by the Bipartisan Policy Center (BPC) yielded similar results and pointed to the second problem: pausing the gas tax would drain the nearly-depleted Highway Trust Fund (HTF) faster (8).

The Fund pays for infrastructure repair across the country via gas tax revenues. It already runs a multi-billion dollar deficit, according to the BPC, and faces insolvency in 2028. Suspending the gas tax could, they warn, cost it another $17 billion.

"Americans are driving more than ever. We want our roads to be pothole-free and safe to drive on," Adam Hoffer of the Tax Foundation told USA Today. "And in order to have those roads and more roads over time, we need funding" (9).

Gas tax alternatives

In recent years experts have questioned the viability of the federal gas tax, offering alternative approaches that they say could offer more benefits.

Vehicle weight fees: The Alliance for Automotive Innovation, which represents major automakers including BMW Group, Ford, Honda and Toyota, wants to scrap the gas tax in favour of vehicle weight fees.

This, the group says, would see every car charged with a one-time fee based on its weight, rather than an ongoing gas tax, likening it to a vehicle registration (10).

"This policy would guarantee every vehicle on the road contributes something to ​maintaining America's transportation network," John Bozzella, the organization's CEO, told Reuters (11).

This plan would also introduce electric vehicles, which don't pay gas taxes, into the HTF revenue stream.

Opponents, however, argue that charging fees based on weight rather than mileage could penalize drivers of heavier vehicles who drive shorter distances, while allowing smaller cars to travel further while paying less (12).

Gas tax rebates: While the non-profit research institution Resources for the Future championed keeping the gas tax, they suggest refunding "a portion of the gas-tax revenues to specific households based on income and location" (13).

This approach, they say, would help offset rising gasoline prices on low income and other affected households, while subsidies could be used to finance fuel-efficient vehicles for many of those same drivers.