President Trump, Kansas and Missouri should give the gas tax a holiday | Opinion

President Donald Trump has floated a simple idea to help drivers effectively mugged by the gas pump: Temporarily suspend the federal gasoline tax.

Good.

That does not mean Washington has conquered global oil markets or restored regular unleaded to the price it commanded when we were still renting DVDs. But it does mean the president is looking for a direct and immediate way to lower the price families see on the sign at the gas station.

This is where economics can lend its light.

The key concept is tax incidence — economist-speak for who really pays a tax. Politicians often pretend the person legally responsible for sending the check to the government bears the burden. Economics answers: Not so fast. A tax may be collected from a business, but it’s paid by consumers through higher prices, workers through lower wages, or owners through lower profits.

In gasoline markets, research generally shows that much of the tax is passed along to drivers. Recent research on the 2022 gas tax holidays estimated that about 79% of that cut reached consumers. Put plainly, if the government cuts a gasoline tax by 10 cents, drivers might see about 8 cents of relief.

So if Trump’s plan to suspend the 18.4-cent federal gas tax — also proposed by Missouri Sen. Josh Hawley — comes to fruition, drivers could see roughly 14 to 15 cents per gallon in relief. A household buying 60 gallons of gasoline a month would save close to $9.

No, that is not a fortune. But it is real money. And when prices are high, every gallon feels personally priced by a James Bond villain.

Kansas and Missouri lawmakers should add their own weight to the cause.

Kansas’ gasoline tax is 24 cents per gallon. Missouri allocates 21.15 cents per gallon to the state transportation department. Combined with a federal holiday, Kansas drivers could see more than 33 cents per gallon in relief, while Missouri drivers could see roughly 31 cents after likely pass-through.

For a family buying 60 gallons each month, that means about $20 in monthly savings in Kansas and nearly $19 in Missouri. That would not make gasoline cheap. But it would make gasoline cheaper. That matters to the worker crossing Wichita before sunrise, the trucker hauling freight down Interstate 70, the parent making one more trip between school, practice and home, and the small business already stretched by inflation.

State transportation revenue

Critics should ask: What about transportation funding?

Fair question. Kansas collected roughly $466 million in motor fuel tax revenue in fiscal year 2025, while Missouri’s state share generated roughly $786 million. These are meaningful revenue streams, but they represent a little over 3% of each state’s total revenue collections.

Asphalt and workers are not free. Kansas and Missouri still need to maintain highways, bridges and local roads. But temporary relief is not permanent repeal. Lawmakers could suspend the tax for a defined period and make the package sustainable by adjusting spending priorities and other revenue decisions.

Moreover, economics is not merely about collecting revenue. It is about incentives, efficiency and whether a tax still serves its original purpose.

For decades, the gas tax has been defended as a user fee. Drive on the road, buy the gas, pay for the road. That bargain made sense when fuel consumption roughly tracked road use.

But the world has changed. Vehicles are more fuel-efficient. Hybrids and electric vehicles are claiming a larger share of the fleet. A tax system built around gasoline consumed becomes less reliable as drivers need fewer gallons to travel the same distance.

At the federal level, the original user fee model has also weakened. Congress has expanded gas-tax spending beyond highways into transit projects, bike paths, recreational trails, beautification programs and other non-highway priorities. What began as a clear bargain — drivers pay for roads and roads get built — now looks more like a general use tax collected at the pump.

President Trump deserves credit for putting gas tax relief on the table. Congress should act. Then lawmakers in Topeka and Jefferson City should do their part by temporarily suspending their own state gasoline taxes as well.

Economics does not promise miracles. It teaches tradeoffs. And in this moment, giving families temporary relief at the pump is a trade worth making.

Michael Austin owns Knowledge & Decisions Economic Consulting and teaches economics at a Kansas university.

This story was originally published May 20, 2026 at 5:05 AM with the headline "President Trump, Kansas and Missouri should give the gas tax a holiday | Opinion."