Trump Dismisses Inflation Fears as Gas Prices Rise After Iran War

Donald Trump tried to sell Las Vegas on tax relief just as gasoline in the city hovered around $5 a gallon, a collision that exposed how quickly war-driven energy costs were undercutting his affordability message. The president told the crowd the country was having “fake inflation because of the fuel, the energy prices,” even as the Iran war pushed fuel costs higher.

Trump used his April 16 stop to center the administration’s “no tax on tips” policy and broader tax cuts signed into law last year, casting Las Vegas as the birthplace of the tips idea. The White House has said the policy was inspired by a Las Vegas waitress, and Trump folded that pitch into a campaign-style swing through Nevada and Arizona aimed at helping Republicans before the November midterm elections.

The economic backdrop was working against him. AAA said gasoline in Las Vegas was averaging about $5 a gallon, up 28% from a year earlier. Higher fuel prices were feeding broader sticky inflation across consumer goods and services, and analysts said it could take weeks after hostilities end for global oil producers to restart production around the Strait of Hormuz. Five Republican strategists said they feared the White House had lost control of the affordability debate, and UNLV political science professor David Damore said, “The cost of living is going to trump anything - no pun intended - over any small change in tax returns.” Trump’s late-March approval rating was 36%, according to a Reuters/Ipsos poll, adding pressure as Republicans face a difficult 2026 map.

The Treasury Department has tried to put hard numbers behind the tax message. It said on April 14 that more than 53 million filers had claimed at least one of Trump’s signature tax cuts, with the average refund this filing season topping $3,400, up 11% from a year earlier. Treasury also said more than 6 million filers claimed the No Tax on Tips deduction, with an average deduction of more than $7,100, and more than 25 million claimed the No Tax on Overtime deduction.

In Nevada, the policy fight is still being tested against household economics. The Culinary Union has organized around the issue, including a “No Taxes on Tips” meeting with Rep. Steven Horsford that drew hundreds of tipped hospitality workers ahead of Tax Day. Nevada Democrats Dina Titus and Catherine Cortez Masto have separately criticized the gambling loss deduction change from 100% to 90% and are pressing to restore it to 100%.

That makes Las Vegas a pivotal proving ground for Trump’s tax message. The city depends heavily on tipped service workers and on commuters who pay at the pump, and the same voters who might benefit from a deduction are also seeing higher fuel bills and a softer tourism economy. Trump’s pitch offered relief on paper; the price board outside the casino floor told a more complicated story.