Where does Joe Biden’s ‘Gas Tax Holiday’ fit in the infrastructure plan?

The infrastructure plan, earlier passed by the US Congress, has been presented as the hallmark of US President Joe Biden’s ongoing term. And the recently announced ‘Gas Tax Holiday’ overlaps with the plan, at least through a financial lens.

Joe Biden proposed a ‘Gas Tax Holiday’ for the US, which would give people a three-month break from paying any federal taxes on gasoline and diesel. However, this still needs a go-ahead from the US Congress.

Also Read: What US Congress says about Joe Biden’s ‘Gas Tax Holiday’

While announcing the strategy, Biden said on Wednesday that the ‘Gas Tax Holiday’ would cost the administration about $10 billion, which is 10% of the bipartisan infrastructure plan that was agreed upon previously.

The lost revenue would otherwise go to the Highway Trust Fund, which finances most federal government spending for highways and mass transit, according to Associated Press reports.

Critics of the tax holiday say that could lead to decreased spending on roads, bridges and other infrastructure that are the hallmark of the Biden presidency. However, the White House also pitched a way around this. It said that the money could be transferred from other government accounts and that infrastructure remains a top priority for the president.

Also Read: US President Joe Biden proposes gas tax suspension for 3 months

Experts interviewed by the Associated Press say that in case Biden’s ‘Gas Tax Holiday’ is extended in the United States, it could have a snowball effect on the country’s economy. Estimates suggest the cost could be tens of billions higher and could jeopardize administration efforts to build and maintain roads and bridges.

American Road & Transportation Builders Association CEO Dave Bauer said that even a short-term suspension of gas taxes “sets a bad precedent and undermines the funding mechanism in the infrastructure investment law that has been the signature policy achievement of the Biden presidency”, AP reported.