Americans were already facing soaring inflation earlier this month, when petrol prices soared to an all-time high. Now, some senators are proposing that the federal government issue stimulus grants or rebate checks to assist alleviate the agony at the pump.
According to one new bill proposed by Reps., families with two children could receive up to $300 per month as long as the nation’s average gas price exceeds $4 per gallon. California’s Mike Thompson, Connecticut’s John Larson, and Illinois’ Lauren Underwood. All three members of Congress are Democrats.
And California Governor Gavin Newsom announced Wednesday that he is proposing to send direct payments of $400 per vehicle to residents of the state, with a cap of two vehicles. The checks, pending approval by California lawmakers, could arrive as early as July, the statement said. California drivers face some of the nation’s highest gas prices, with the state’s average price of $5.87 per gallon on Wednesday, according to AAA.
American consumers could face a $2,000 increase in costs this year as a result of the recent surge in gas prices — on top of an additional $1,000 in grocery store costs as a result of the steepest inflation increase since 1982. Consumers have already reported reducing their spending or driving less, with the majority blaming sticker shock at the pump.
The gas stimulus would “provide middle-class Americans with monthly payments to alleviate the financial burden of this global crisis,” Thompson said in a statement announcing the proposal, referring to Russia’s invasion of Ukraine, which has driven up gas prices.
At the moment, millions of Americans would qualify for the payments based on current gas prices, which, according to AAA, averaged $4.24 per gallon on March 22.
While it is unclear whether any of the bills will be introduced, lawmakers are clearly concerned about the strain on American households caused by high gas prices. The following describes how these plans might operate.
For families, $300 per month
The Gas Reimbursement Act, as proposed by Thompson, Larson, and Underwood, would offer a $100 monthly energy rebate to each household member. This refund would be available for the remainder of 2022 if the national average gas price exceeded $4 per gallon in any given month.
The measure would provide $100 to joint and single taxpayers, as well as $100 to each dependant. In other words, a family with two children may get up to $300 in rebate checks every month.
The idea would operate similarly to the federal government’s three stimulus checks provided in 2020 and 2021, with payments targeted at low- and middle-income families. Individuals earning less than $75,000 per year would get the full $100 refund, but those earning up to $80,000 would have their checks tapered off.
According to Thompson’s statement, joint filers earning less than $150,000 would qualify, with the payout phasing out at $160,000 in family income. The plan makes no mention of how the refund checks would be paid, and the bill’s text has not yet been released.
Family rebates of $360 per year
A second proposal, introduced by Rep. Ro Khanna, a California Democrat, and Sen. Sheldon Whitehouse, a Rhode Island Democrat, would provide a quarterly rebate to consumers based on an oil and gas industry tax.
According to the lawmakers’ statement, the Big Oil Windfall Profits Tax would levy a per-barrel tax equal to 50% of the difference between the current price of a barrel of oil and its pre-pandemic average price between 2015 and 2019.
The two lawmakers calculated that if the price of a barrel remains at $120, the tax would raise approximately $45 billion annually, providing $240 to single filers and $360 to joint filers.
“As a result of Russia’s invasion of Ukraine, gas prices have skyrocketed, and fossil fuel businesses are reaping record profits. While everyday Americans are suffering at the pump, these firms have profited billions and utilised the proceeds to reward their own stockholders “According to Khanna’s statement.
Rebates depending on the revenues of energy companies
Rep. Peter DeFazio, D-Oregon, introduced a third plan that would establish a refund based on oil industry profits. The amount Americans would get is unknown since the idea is dependent on taxing oil and gas firms’ earnings this year.
“My proposal will tax Big Oil’s excess profits in 2022 and reinvest the cash in American families,” DeFazio said in a statement announcing the bill, dubbed the Stop Gas Price Gouging Tax and Rebate Act.
DeFazio cited a study by the watchdog organisation Accountable.us estimating that the major oil and gas firms would make a record $205 billion in profits in 2021.
The Treasury Department would compute the tax credit levels based on revenue generated by oil and gas company profits being taxed. According to a statement from Rep. Underwood, who proposed the measure alongside DeFazio, the bill proposes a one-time 50% tax on any adjusted taxable income in 2022 that exceeds 110 percent of their average adjusted taxable income from 2015 to 2019, or the years before the pandemic.
The reimbursements, like the government stimulus handouts, would be income-based. The payments would be made to single filers earning less than $75,000 and joint filers earning less than $150,000 each year.