As the Biden administration considers a holiday on the federal gas tax, an opinion piece in The New York Times says the move may not actually lead to a price reduction at the pump.
It states, "By the iron law of supply and demand, if the demand for gas exceeds supply at the tax-free price, the price must move back up to around where it was before to bring the market back into balance. That would mean bigger profits for refiners and retailers."
Ford School economics professor Betsey Stevenson is quoted, saying, "We can cut the tax but it might not change the price.”
