States lose major tool to ease gas crisis thanks to Trump’s tax bill

Some states are stepping in to help drivers ease the burden of high fuel costs caused by the war in Iran. Most states, however, won't be able to.

David Goldman, a senior CNN business reporter, explained that for states offering the gas tax holiday, drivers are saving about 40 cents per gallon, or as much as $8, in a 20-gallon truck or SUV. The problem, however, is that gas stations are setting the prices, not the states.

"So a gas station has to play ball. They have to lower their prices by as much as the state gas tax," he said. "That's why generally we're seeing about 80 percent of those savings go into your pocket, not the full 100."

A greater problem is that most states can't afford to offer drivers a gas-tax holiday. Goldman said that key provisions in President Donald Trump's "Big, Beautiful Bill," passed by the GOP-led House and Senate, cut funding to states so severely that states simply don't have the money to give people that kind of tax cut.

"Remember, this took billions of dollars of funding away from states. That means it's probably not going to happen because states need the money from the gas tax to fill their coffers," he said.

His other warning is that this fuel crisis will last longer than most realize, and much longer than the spike in 2022.

"We think it's just not going to be feasible for states to lower that gas tax. And I want to say one more thing about this," said Goldman. "In 2022, it was a very, very different economy. Today, people are going into their savings. In 2022. People had a lot of savings because of all the stimulus. That's why people are asking this question. They really want to know, is there any way that we can lower their prices? I wish I had better news, but the gas tax could be one way if we decided to do that."

Congress is considering a gas tax suspension that would reduce the federal gas tax by 18 cents. But legislation in Congress hasn't been moving very efficiently.

Gas taxes generally fund wear and tear on the state's roads, helping build better infrastructure, fund public transportation and other related things.

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