No, it would not. The lost tax revenue would be made up by increased ponzi borrowing, spending and more debt, which is what has to be done with the short fall in SS. The result is that gas would do down due to the removal of the tax and up because the dollar is further destroyed in its global purchasing power and the net result would be more interest due on the national debt. Gas prices would rebound.
If you eliminated every expenditure of the US government including defense, except welfare, unemployment, medicare, medicaid and social security (pensions) and kept just those at current levels you would still be 1 trillion dollars in debt each year on the federal level.
This is arithmetic not politics. This is the problem on both state and federal levels. No one, including Ron Paul, is dealing with it.
In this age of short-term fixes, kick-the-can-down-the-road, etc., if “ - - - The result is that gas would do down due to the removal of the tax - - -, “ then the politician who signed THE FEDERAL FUEL TAX HOLIDAY BILL would be able to smile on camera holding up a newspaper that night with the glowing headline: “PAIN AT THE PUMP REDUCED.”
The basic problem is that Governments, World wide, are trying to compete with a marketplace system that has existed for thousands of years.
Since 95 % of the Oil sold in the World is under the control of National Governments (the USA is one of the few exceptions), it is only natural for a politician to think that the price of Oil is also controlled by Governments.
The reality is that SUPPLY AND DEMAND still are the major forces that controls the pricing of Oil, although few Governments, or cartels of governments will publicly admit that cruel, and very humiliating (to them) reality.