When gas prices reached an all-time high earlier this month, Americans were already facing blistering inflation. Some senators are now calling on the federal government to provide stimulus funds or rebate cheques to assist alleviate the pain at the pump.
According to one new plan filed by Reps., families with two children may receive up to $300 per month as long as the national average gas price reaches $4 per gallon. Mike Thompson from California, John Larson from Connecticut, and Lauren Underwood from Illinois are the winners. All three members of Congress are Democrats.
On Wednesday, California Governor Gavin Newsom announced a proposal to send direct payments of $400 per vehicle to citizens of the state, with a ceiling of two automobiles. The checks might arrive as soon as July, pending approval from California lawmakers, according to the statement. According to AAA, drivers in California face some of the highest gas prices in the country, with the state average at $5.87 per gallon on Wednesday.
Due to the recent climb in petrol prices, American families could face $2,000 in additional charges this year — on top of an extra $1,000 in grocery store costs due to the sharpest rise in inflation since 1982. Consumers are already reporting that they are cutting back on spending or driving less, with the majority citing sticker shock at the pump.
The gas stimulus would “give middle-class Americans with monthly payments to alleviate the financial strain of this global catastrophe,” Thompson said in a statement announcing the proposal, alluding to Russia’s invasion of Ukraine, which has pushed up gas prices.
Currently, millions of Americans would be eligible for the reimbursements based on current gas prices, which, according to AAA, averaged $4.24 per gallon on March 22.
While it’s uncertain whether any of the legislation will be introduced, politicians are clearly concerned about the hardship on American households caused by high gas costs. Here’s how these ideas might function.
Families might pay $300 per month.
The Gas Reimbursement Act, presented by Thompson, Larson, and Underwood, would provide a $100 monthly energy rebate each individual. That rebate would be available for the remainder of 2022, as long as the national average gas price surpassed $4 per gallon in any given month.
According to the law, both joint and single tax filers would receive $100, and each dependant would receive $100 as well. In other words, a family with two children might receive up to $300 in rebate checks per month.
The idea would function similarly to the three stimulus checks issued by the federal government in 2020 and 2021, in that the payments would be targeted at low- and middle-income households. Singles earning less than $75,000 a year would receive the full $100 rebate, while those earning up to $80,000 would see the checks phased down.
According to Thompson’s statement, joint filers earning less than $150,000 would qualify, with the payout tapered out at $160,000 in household income. The plan does not indicate how the rebate checks would be paid for, and the bill’s text has not yet been published.
Rebates of $360 per year are available for families.
A second plan from Rep. Ro Khanna, a Democrat from California, and Sen. Sheldon Whitehouse, a Democrat from Rhode Island, would provide customers with a quarterly rebate based on an oil and gas company tax.
According to a statement from parliamentarians, the Big Oil Windfall Profits Tax would charge 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 congressmen calculated that assuming the per barrel price remains at $120, the tax will raise nearly $45 billion each year, providing $240 to single filers and $360 to couple filers.
“As a result of Russia’s invasion of Ukraine, gas prices are skyrocketing, and fossil fuel businesses are making record profits. These corporations have generated billions of dollars and utilised the earnings to reward their own shareholders while ordinary Americans are suffering at the pump “Khanna stated in a statement.
Rebates depending on the revenues of energy companies
Rep. Peter DeFazio, D-Oregon, has proposed a third proposal that would create a rebate based on oil company profits. Because the idea is predicated on taxing this year’s profits from oil and gas firms, it’s unclear how much Americans would receive.
“In 2022, my measure would tax Big Oil’s excess profits and refund the income to Americans,” DeFazio said in a statement regarding the Stop Gas Price Gouging Tax and Rebate Act.
According to a report from the watchdog group Accountable.us, the largest oil and gas companies will earn a record $205 billion in profits in 2021.
The Treasury Department would calculate the tax credit levels based on the revenue generated by taxing oil and gas company earnings. According to a statement from Rep. Underwood, who introduced the bill with DeFazio, the bill proposes that large oil and gas companies pay a one-time 50 percent 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 preceding the pandemic.
The rebates, like the government stimulus packages, would have income limits. The payments would be available to single filers earning less than $75,000 per year and joint filers earning less than $150,000 per year.