Even as the U.S. and Iran wrestle over an agreement to reopen the Strait of Hormuz, surging gas prices have turned the government’s attention to a perennially popular fiscal scam: Ease the pressure on household budgets with a gas tax holiday. In reality, such a plan to curry favor with voters would make them, all things considered, worse off. Responsible policymakers should have nothing to do with it.

Back in 2022, President Joe Biden also called for a temporary suspension of the gasoline tax when Russia’s attack on Ukraine sent energy costs soaring. Now, with the price of gas back above $4 a gallon and midterm elections approaching, a different White House is floating the same idea. Republican Senator Josh Hawley promptly introduced a bill to lift the tax for 90 days. Democrats in both chambers have offered similar proposals, and several states have already suspended their own gas taxes.

The idea is politically attractive because the price of gas is so conspicuous. Its superficial appeal doesn’t make the fiscal impact any less damaging.

Note first that the immediate benefit to households is trivial. The federal tax is 18.4 cents a gallon; state taxes vary, adding on average another 33 cents. The evidence is clear that retailers and producers keep some of the difference when the tax is cut, but even if nearly all of it passed through to consumers, suspending the federal levy would save the typical driver less than $10 a month — enough to lower total household spending by around 0.2%.

And the cost of this negligible benefit is substantial. The federal gas tax finances the Highway Trust Fund, used to pay for maintaining interstate highways and other infrastructure. The fund is already on course for insolvency in 2028.

Fewer revenues mean either spending will need to be cut — degrading the quality of the country’s roads and bridges even further — or other taxes will need to be raised to cover the shortfall, leaving households in the aggregate back where they started. Or the gap will be covered by extra public borrowing, worsening the fiscal outlook and adding to upward pressure on interest rates.

Not to mention that a gas tax holiday gets every incentive backward. It gives producers a windfall when energy prices are already elevated, and it increases demand for oil just as supply is suppressed, driving pre-tax prices higher still.

To be sure, the gas tax needs reform. Viewed as a user charge for drivers sufficient to cover the system’s costs, it’s actually too low (and much lower than the equivalent taxes levied in other advanced economies). Ideally, it would be replaced by a tax on vehicle miles traveled, which would align more closely with the building and maintenance outlays that driving actually imposes. A component could be added to reflect the environmental harm of powering vehicles with gas as opposed to electricity.

Granted, this is a difficult time for any such reform. But that’s no reason for the government to make a bad policy even worse. Recall that the Biden administration didn’t get its way in 2022: Senate Republicans refused to go along, with then-minority leader Mitch McConnell calling the idea an “ineffective stunt.” His words were true then and still are. Political calculations shift to and fro, but fiscal and economic realities don’t.

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