Jon Hansen’s call for a summer gasoline-tax holiday in South Dakota wouldn’t worsen South Dakota’s deficit, because (a) South Dakota can’t have a deficit, per South Dakota Constitution Article 12 Section 7, and (b) Hansen pays for his tax break with the slushy Future Fund, so we can keep building roads and bridges.
But Hansen’s mimicry of Trump’s recent mumblings and the actual legislation put forward by House Democrats two months ago is a bad idea because it won’t really provide the price relief Hansen and other short-sighted/vote-sighted politicians promise:
The federal tax currently stands at 18.4 cents per gallon of gas and 24.4 cents per gallon of diesel fuel. Getting that money back just won’t make a meaningful difference when gas prices have gone up by 40% or even higher in some parts of the country, said Gilbert Metcalf, a visiting professor at the Massachusetts Institute of Technology’s Sloan School of Management.
Suspending the gas tax also won’t help farmers because they already get an exemption from the gas tax, Metcalf said.
“If eliminating the tax leads to a little bit more demand for gasoline, then that’s just going to drive up the pre-tax price, which will just hurt farmers yet again,” Metcalf said.
When there’s a “shock” to the industry, like a war or a hurricane, prices go up instantly, but they come down slowly, said Akshay Rao, a marketing professor at the University of Minnesota.
Consumers will already have gotten used to paying higher prices, so retailers will continue charging them that amount until they face competitive pressure from other gas stations, Rao explained. So even if the gas tax were suspended, we might not even see gas prices go down by the full 18 cents, Rao said.
Even when a “shock” to the system is removed, gas retailers will have higher-priced inventory at their gas stations, which means they’ll need to recoup those costs before they can reduce prices, Rao said [Janet Nguyen, “Why Suspending the Gas Tax Won’t Help Consumers,” Marketplace, 2026.05.14].
While farmers get a break on their off-road diesel, they still have to burn fully taxed fuel to haul their crops to the elevator and go to town for supplies. The Soy Transportation Coalition estimates suspending federal and state fuel taxes would save an average farmer $2.70 a day. But at that rate, we’d have to suspend the gasoline tax for four and a half years to help farmers recoup the $4,500 extra they’ll pay for fuel to manage 500 acres of corn and soybeans for one growing season at Trumpflated fuel prices.
Georgia suspended its fuel tax in March and extended that suspension yesterday into June. A year ago, before Trump wrecked the oil economy, regular gasoline in Georgia cost 91.8% of the national average. Today, Georgians pay 88.7% of the national average pump price. Georgians are still paying 54.4% more to fuel up their cars in May than they were in peaceful February.
Neither suspending the gasoline tax nor any other magic policy will provide immediate, meaningful relief for high prices at the pump. Real relief will only come from booting Trump and returning to the rational policies of President Joe Biden: protecting supply by not bombing Iran and not blockading the Strait of Hormuz, and reducing demand by promoting renewable energy and electric cars.