United States | Gas tax

The debate over suspending America’s petrol tax

Shaky economics v shiny politics

|Washington, DC

“I WILL DO everything in my power to limit the pain the American people are feeling at the gas pump. This is critical to me.” So declared Joe Biden when announcing the first round of sanctions against Russia on February 24th. That petrol prices are critical to President Biden is beyond doubt. High inflation is already weighing on his popularity. Soaring oil prices, a consequence of the sanctions, will only add to the pressures. How can he limit the pain? The structure of the sanctions, ensuring that Russian oil can still reach global markets, is part of the answer. Another part may be a proposal that has sparked debate among economists in America: a reprieve from petrol taxes for the rest of this year.

This article appeared in the United States section of the print edition under the headline “Pumping up the votes”

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