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Governor Charlie Baker will support a gas tax holiday in Massachusetts

Gov. Baker supports gas tax holiday on top of proposed federal suspension
Gov. Baker supports gas tax holiday on top of proposed federal suspension 02:23

BOSTON - Every little bit helps for consumers when it comes to sky high gas prices, but many say a three month suspension of the federal gas tax doesn't go far enough.  "Any little thing helps but 18 cents is not that much.  We need more of a solution," said taxi driver Charles Amisiel. 

President Biden's call for the suspension of the 18 cent per gallon federal tax is meant to provide some breathing room for consumers.  But that's assuming all the savings are passed onto them, which makes some economists skeptical. 

"It could well be that producers take some of that and don't lower the price to consumers by the full reduction," said Boston College economist Robert Murphy.  He says a lower price per gallon could increase the demand and increase the price again. 

But in the end it's a savings of a few dollars for a fill-up. "Probably the perception of the gesture matters more than the economic impact it would have on the average consumer," said Murphy. 

Mary Maguire with AAA of Massachusetts says it could also be offset by other factors such as high demand with the upcoming fourth of July holiday.  She says a record 42 million people are expected to get behind the wheel. 

"Even though we could see a drop due to the President's proposal, if it succeeds, it would be offset by other market factors that push up the price at the pump for all of us," said Maguire. 

President Biden is calling on states to suspend their own gas taxes which in Massachusetts is 24 cents a gallon.  Governor Baker issued a statement saying he would support it. "Thanks to a balanced budget combined with surplus tax revenues, there is more than enough funding available to suspend the gas tax," Baker said.   

But Senate President Karen Spilka and House Speaker Ron Mariano said in a statement the gas tax holiday would only profit oil companies and "the legislature is working diligently to find ways to deliver direct relief to residents." 

President Biden needs the support of Congress for the gas tax holiday.

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