President Donald Trump‘s latest effort to curb soaring gas prices caused by the war in Iran is to call for a suspension of the federal gas tax.Since the war started in late February, gas prices have risen nearly 50%, with the national average sitting at $4.50 per gallon as of Tuesday.It is unclear, though, whether suspending the federal tax of 18.4 cents per gallon on gas and 24.4 cents per gallon on diesel would bring a meaningful reduction in prices for consumers.
Here’s what to know about the federal gasoline tax.
What is the federal gas tax?
The federal gas tax was first introduced during the Great Depression as part of the Revenue Act of 1932.
The law was enacted by President Herbert Hoover as a temporary 1-cent-per-gallon tax to help reduce the federal budget deficit. It was scheduled to expire in 1934, but budget issues kept it in place, and it became permanent in 1941.
