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ACCORDING TO LIZ - In February, Trump and Netanyahu launched their illegal and ill-fated war against Iran. Three months later, people around the world are suffering from the explosion of oil prices due to Iran’s ability to prevent tankers passing through the Strait of Hormuz.
Even though the United States does not rely on that oil, the prices that American producers can command selling to markets in Europe and Asia that have been impacted have increased competition for local reserves, pushing up prices across the United States on average by $1.48 to $4.46, or 50%. That’s huge.
It’s far worse in California where motorists routinely see numbers at the gas station in excess of $6 and $7 a gallon, more in places where independent contractors can’t make it on the reduced profit percentages and have pulled out, leaving a sole business able to manipulate prices at will.
In response, Trump and a number of state governors have floated suspensions of federal and state gas taxes.
Makes sense? Maybe. It might help ordinary Americans, suffering from the economic carnage from Trump’s war. But, as with all apparently easy fixes, there are fatal flaws.
The math: the federal gas tax is 18.4 cents per gallon (24.4 cents for diesel); state taxes and fees on gas average 33 cents per gallon (35 cents for diesel) so would not come close to covering the price-at-the-pump increase.
The consequences: 60 percent of the federal gas tax goes to the Highway Trust Fund to fund highway and bridge construction, with the remainder earmarked for mass transit initiatives, including improving public transportation.
The federal tax was last raised on October 1, 1993, and is not indexed to inflation, which increased 122% from October 1993 until November 2025.
But those taxes at least pay for infrastructure beneficial to the consumer instead of padding oil executives’ profits.
On July 1, 2025, California bumped up its tax on gasoline and diesel by 1.6 cents per gallon and 1.2 cents respectively.
California has the highest-in-the-nation state gas tax of 61.2 cents per gallon (70.9 including other fees). Due to how the tax is calculated with those additional fees larded on top and, perhaps, with a tip of the hat to the trucking industry’s importance, only 46.6 cents per gallon for diesel .
California's gas tax funds state transportation infrastructure projects, including highway maintenance and improvements, as well as community clean air and climate resilience initiatives. It also supports California's Low Carbon Fuel Standard, Cap-and-Trade, and other programs aimed at reducing emissions and promoting sustainable energy.
Since 2017, the state’s gasoline excise tax has increased by 106% from 29.7 cents, and its diesel tax by nearly 30% from 36 cents. How much more Californians have to pay starting this July will depend on a multitude of factors.
Yes, with the tax being a percentage of the per gallon price the state can expect significantly more income at least until the end of the year, but what it is spent on including those underlying fuel costs will almost certainly go up exponentially as well
How many Californians want to see their highways crumbling; how many Angelenos wish for the return of eye-burning smog from inversions?
As an aside, the consumer does not pay these taxes; they are paid by the oil company when fuel is removed from the refinery or tank farm. The rates posted on pumps is a cynical CYA by gas companies to mitigate consumer fury at the prices they charge by pointing a finger at governments.
The federal Highway Trust Fund also depends on taxes from tire manufacturers, truck sales, and the heavy vehicle use tax paid by truck owners; all of which are oil industry-dependent and will be severely squeezed by the surge in oil prices.
Along with price-at-the-pump consumer pain, diesel prices have similarly been soaring along with those for of jet fuel, increasingly impacting the cost of transporting food and other goods
And, no Dorothy, fuel prices will not drop on the signing of a ceasefire – now at risk from tit-for-tat attacks by both sides; it will be months and years.
Americans should have learned, even if its president has forgotten, the lesson that gas prices rise like the rockets being used against Iran and Lebanon but flutter back down like a feather. And by then there will be more wars, more crises.
In addition, there is all that destroyed infrastructure overseas to rebuild, global shortages to replenish, supply chains to repair, politicians to pay off…
The national debt of the United States has grown by over $2 trillion so far during Trump’s second reign. Cutting taxes, even these seemingly small ones, will only hurt ordinary Americans by ravaging our roads and bridges. While adding to the debt with which this government is saddling the next generation.
How about targeting those who have been making out like bandits over the past 90 days. Oil and armaments companies and their investors.
Between the Trump administration’s policies in favor of fossil fuels and its multiple military actions since Trump took office, the S&P Oil & Gas Exploration Index grew 35% last year; the S&P Aerospace & Defense Index 48%.
Why not, as perhaps a step in the much-ballyhooed but eternally-blockaded-by-corporate- payola Wall Street financial tax, a whopping tax on every purchase and sale of stocks in the fossil fuel and war-related industries.
Wars are fraught with victims and profiteers. Such a targeted solution would benefit both the American economy and Americans while beating back the profiteers who are also primarily responsible for the escalating costs of food and goods that the current administration, despite Trumps election promises, has failed to rein in.
(Liz Amsden is a former Angeleno now living in Vermont and a regular CityWatch contributor. She writes on issues she’s passionate about, including social justice, government accountability, and community empowerment. Liz brings a sharp, activist voice to her commentary and continues to engage with Los Angeles civic affairs from afar. She can be reached at [email protected].)
