Gas Tax Reduction Act

This bill, known as the Gas Tax Reduction Act, directs the federal government to withhold 8% of transportation funding from any state that raises its gasoline tax to $0.50 per gallon or higher. The affected states would receive reduced federal highway and transportation funds until they lower their gas tax below the specified threshold. The mechanism automatically triggers the withholding on the first day of each fiscal year following the tax increase, without requiring additional federal approval. This policy change directly impacts state budgets and transportation infrastructure projects by linking federal funding to state-level gas tax decisions.