Here’s Why Cutting Gas Taxes Doesn’t Work When Prices Soar

A new Urban Institute study finds tax rebates are a better solution, while efforts that discourage driving would have the most significant long-term impact on the inflation problem. Governing

By Jake Blumgart

April 26, 2022

Since the beginning of 2022, fears about escalating gas prices have dominated the public consciousness. Even in late January, with sky-high omicron case counts, articles began circulating about $100 barrels of oil by summer.

They came much sooner than that, thanks to Russian President Vladimir Putin’s war in Ukraine, breaking into triple digits on March 1. Two weeks later AAA reported that the average gallon of gasoline reached $4.32, the highest price (not adjusted for inflation) since the Great Recession. Prices are likely to go up more in the summer months.

This all comes at a time when America is more gas hungry than ever. As of 2019, Americans drove 14,263 miles a year — almost 5,000 more than the next most car-centric country.

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