Gas tax holidays are counterproductive, research shows
Summary
Gas tax holidays are counterproductive, research shows
What changed
The Tax Foundation published research arguing that gas tax holidays are economically counterproductive policy interventions. The analysis, authored by Adam Hoffer, highlights that suspending fuel taxes artificially lowers gas prices temporarily but fails to address the underlying factors driving fuel costs upward. The piece specifically critiques Georgia's 60-day suspension of its state motor fuel tax as poorly timed given rising roadway spending needs.
For policymakers and fiscal analysts, the research underscores that fuel tax suspensions create a paradox: they reduce the dedicated funding streams for highway and infrastructure maintenance while providing only temporary relief at the pump. Government agencies considering similar measures should weigh the short-term political appeal against long-term infrastructure funding shortfalls.
What to do next
- Monitor for updates on gas tax policy debates
Archived snapshot
Apr 9, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Gas tax A gas tax is commonly used to describe the variety of taxes levied on gasoline at both the federal and state levels, to provide funds for highway repair and maintenance, as well as for other government infrastructure projects. These taxes are levied in a few ways, including per-gallon excise taxes, excise taxes imposed on wholesalers, and general sales taxes that apply to the purchase of gasoline. prices are soaring across the country, and lawmakers are naturally looking for ways to alleviate the pain at the pump. While gas tax A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. holidays—which temporarily suspend fuel taxes to artificially lower the price of gas—are a politically welcomed intervention, taxpayers shouldn’t be so quick to celebrate.
In a time of political and economic uncertainty, drivers should be aware that these sorts of gimmicks can be economically harmful. Pausing fuel taxes makes funding roads and highways more difficult while doing nothing to address the underlying issues driving prices upward.
Georgia has become the latest target of this type of counterproductive measure. Governor Brian Kemp (R) recently enacted a 60-day suspension of the state’s motor fuel tax. Yes, gas prices are high today, but with roadway spending in Georgia on the rise, there could not be a worse time to decrease the taxes that are used to fund those very expenditures.
This is a preview of our full op-ed originally published in MarketWatch.
Stay informed on the tax policies impacting you.
Subscribe to get insights from our trusted experts delivered straight to your inbox.
About the Author
Adam Hoffer
Director of Excise Tax Policy Adam Hoffer is the Director of Excise Tax Policy at the Tax Foundation. Dr. Hoffer earned his PhD in Economics from West Virginia University and his undergraduate degree from Washington & Jefferson College.
Related changes
Get daily alerts for Tax Foundation Research & Analysis
Daily digest delivered to your inbox.
Free. Unsubscribe anytime.
About this page
Every important government, regulator, and court update from around the world. One place. Real-time. Free. Our mission
Source document text, dates, docket IDs, and authority are extracted directly from Tax Foundation.
The plain-English summary, classification, and "what to do next" steps are AI-generated from the original text. Cite the source document, not the AI analysis.
Classification
Who this affects
Taxonomy
Browse Categories
Get alerts for this source
We'll email you when Tax Foundation Research & Analysis publishes new changes.