The Iran war is crushing consumers. A ‘gas tax holiday’ wouldn’t fix that in Illinois.

The price of gasoline is at its highest level since the summer of 2022, and the root cause is no mystery.

President Donald Trump’s unpopular war in Iran has been disastrous for drivers. The closure of the Strait of Hormuz, a critical shipping route globally, has restricted supply and sent oil prices through the roof. Fuel prices are up 50% since the start of the war, and 8 in 10 Americans say prices at the pump are straining their budgets.

The effects extend far beyond the fuel we put in our cars. Higher oil and gas prices are raising costs of everything from crop fertilizer and groceries to airline tickets, causing widespread inflation — which is expected to accelerate to 4% by summer. As both credit card debt and people’s frustrations have mounted, consumer sentiment has reached a historic low.

The energy price spikes resulting from the Iran war are having major consequences for Illinois. Motorists are now paying about $5 per gallon for regular gasoline — up from just $3 per gallon in February. Diesel hit $6 a gallon this month, a record high for our state. Research shows this $2 increase at the pump is costing the typical two-adult household about $135 more per month.

People are understandably looking for answers. And every time gas prices skyrocket, one particular idea bubbles up that sounds good in theory but is bad public policy in practice: a “gas tax holiday.”

To be clear, fuel taxes represent less than one-fourth of the cost of a gallon of gas, but they have nowhere near the influence over prices of military conflicts that constrain the global oil supply.

It’s important to understand that gas tax suspensions do not contain a mechanism to ensure the savings are passed on to motorists. When gas tax suspensions have been employed, research reveals that very little relief actually reaches drivers. More often, it results in windfall profits to the oil companies who already have seen their profits double.

What a “gas tax holiday” really does is slash funding available for transportation infrastructure. That funding is the foundation for a safe and efficient transportation network and a competitive Illinois economy.

Illinois’ motor fuel tax generates $240 million per month for maintenance of the state’s roads and bridges. The sales tax on gasoline, which some lawmakers have proposed suspending, delivers more than $70 million every month for public transit. Collectively, these investments support thousands of construction jobs and grow our economy by more than $2 per dollar invested. Suspending these taxes would push people out of work and slow economic growth. It also would mean more potholes, crumbling bridges, and delayed buses and trains — all of which increase downstream vehicle repair costs and lengthen commute times.

Policymakers have better tools at their disposal to address the cost-of-living crisis. At the federal level, eliminating tariffs and restoring tax credits for health insurance plans are clear examples that would improve affordability for families. And when it comes to gas prices, the simple truth is that the only real solution is to restore predictability and stability to global oil markets.

In the absence of federal action, Illinois lawmakers could provide some relief by temporarily suspending sales taxes on things like clothing and footwear or expanding the Earned Income Tax Credit. Illinois could also raise the minimum wage to $17 per hour to expand annual earnings by $1,200 for 800,000 workers, a move that would have no direct impact on state revenues.

Illinois cannot undo the mistakes of the federal government. A temporary suspension of the gas tax may work for political theater or election-year clips on social media, but it wouldn’t address the root cause of the problem. The data consistently shows that it would give motorists scant relief while creating even more costly economic burdens down the line.

• Frank Manzo is an economist at the nonpartisan Illinois Economic Policy Institute.