Trump’s Proposal for a Fuel Tax Cap in California
President Trump is exploring the idea of a cap on state fuel taxes, which could significantly relieve California drivers who have been grappling with high gas prices.
In a recent conversation with the California Post, he suggested that this initiative could lower gas bills by a substantial 40%. “Gasoline in California could be $2.50,” he remarked.
Price reduction at the pump has become a key part of Trump’s agenda on affordability, and he aims to tackle California’s notoriously high gas tax rates.
As of January, the average gas price in the U.S. was $2.83 per gallon, while Californians faced a steep $4.23—only Hawaii had higher prices. Just on Monday, a gallon of regular gasoline hit $4.99 at a Mobil station in Los Angeles.
“We will do that. We will put a cap on it. It’s not fair,” Trump stated, although he didn’t clarify whether this would involve new legislation or executive action.
He criticized California Governor Gavin Newsom, claiming that “California, every time we cut taxes, they just raise them,” pointing to other states where prices are much lower. “In Alabama, there are a lot of them around $2 and no one will believe it. We’re training like crazy,” he said.
For residents like Greg Maness, who filled his tank at SoCal Gas in Los Angeles, any news of lower gas prices brings hope. “For me, it’s always double the rest of the country. It’s always depressing and wondering where everything is going,” he shared.
The federal gasoline tax stands at 18.4 cents per gallon, but California adds its own hefty taxes, totaling 71 cents—the highest in the nation.
How Trump intends to implement this cap remains uncertain. A federal bill could be one pathway, but the slim Republican majority in Congress might complicate its passage. Another possibility is including it in budget reconciliation, but that has stipulations requiring it to be closely related to spending.
Alternatively, the executive branch could leverage its powers to enforce such a cap, though any move might encounter legal pushback, as seen in past tax disputes with Democratic-led states.
There actually is a precedent for federal influence over state regulations. In 1984, Congress cut federal highway funds to states that didn’t adopt a minimum drinking age of 21 years, which South Dakota unsuccessfully contested all the way to the Supreme Court.
California’s gas tax was introduced in 2017 to support road repair efforts and increases annually based on inflation. In 2018, voters declined to repeal a referendum that mandated these increases.
Only 37% of gas prices reflect the cost of crude oil; the remainder comes from refining, distribution, and various taxes. By contrast, other states have much lower combined gas taxes—Texas charges only 20 cents while New York has 25 cents.
Currently, some states have gas prices below $2.50, including Texas, Missouri, and Kansas.
Trump dismissed the notion that California needs such revenue for infrastructure. He stated, “We don’t have the infrastructure in place. We have one of the most incompetent governments… Today, we’re drilling more oil than we’ve ever drilled before, and yet California raises prices and taxes each time the price goes down.” He expressed frustration, explaining that people often don’t recognize the complexities behind these pricing issues, lamenting, “It’s a shame.”
