As international oil prices soar due to Western energy sanctions against Russia, U.S. states are offering temporary exemptions from oil tax or cash subsidies. As oil prices pushed up all prices and the people’s livelihood became serious, they took the risk of a decrease in state tax revenues and started to “quickly extinguish the fire.”
According to the U.S. AAA, the nation’s average gasoline price stood at $4.24 per gallon as of July 25, up 20 percent from $3.57 a month before the war in Ukraine. It jumped 50 percent from a year ago. In some parts of western California, it exceeds the $7 mark and is approaching the $8 mark.
Recently, Maryland, Georgia, and Florida temporarily suspended oil taxes. New York, New Jersey, Illinois, Massachusetts, Maine, Michigan, Minnesota and Tennessee are also considering exempting oil taxes. The oil tax exemption will be made temporarily for one to three months. In Maryland, gasoline prices dropped 44 cents from $4.25 a gallon to $3.81 shortly after the oil tax exemption.
Some states have decided to pay cash for oil tax cuts. California has decided to directly pay $400 a month in fuel tax subsidies per vehicle. The budget alone is set at $9 billion a year. Georgia has also come up with a plan to pay 250 to 500 dollars to residents in the form of an oil tax refund, while Maine has come up with a groundbreaking plan to distribute oil subsidies up to 850 dollars.
The Democratic Party is considering reducing federal oil taxes at the federal level or paying about $300 a month to the entire nation. The Democratic Party is under attack by the Republican Party ahead of the midterm elections in November that “extreme inflation has disrupted people’s livelihoods.”
