As with current taxes on gasoline, consumers in poor and minority communities will be the hardest hit. People in these areas earn less per household than the national average, and must pay substantially larger portions of their budgets to operate their cars and trucks. For small businessmen or people with long commutes or family obligations, gas price increases could force many to make difficult and life-altering decisions. At a more macroeconomic level, the costs of a shift to ethanol will also punish the nation's economy. Ethanol currently benefits from a 5.4 cents per gallon federal tax subsidy.
Many states also offer additional ethanol tax breaks.
Without such subsidies, ethanol is considerably more expensive than competing gasoline compounds. However, a large-scale shift to ethanol could have a major impact on federal tax revenues. A widespread demand for ethanol RFG would put a tremendous strain on the existing supply. Thus, the idea for the EPA to mandate the use of ethanol in RFG carries with it a great deal of difficulties, leading many to wonder why the EPA and many politicians continue to protect ethanol. Part of the reason may be purely political.