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Stimulus checks for high gas prices: proposed relief

The government wants to give you money to pay for gasoline.

Gas prices have risen steadily month after month in 2021, and they have reached historic highs since Russia invaded Ukraine. Now lawmakers want to help families cope with rising costs by suspending gas taxes or simply sending money.

Although the proposed payments are not officially called stimulus checks, many recipients would see them in essentially the same way. This would be money paid by individual states or the federal government to provide relief to eligible people.

In this case, relief is needed due to high gas prices. Nationally, gas prices average about $4.24, according to AAA data. Prices are just below the all-time high, and their recent spike — from $3.53 a gallon on Feb. 21 to $4.32 on March 14 — was the fastest on record in three weeks, the US said Wednesday. Energy Information Administration.

Lawmakers have proposed new solutions to help cushion the blow. A bill proposed last week by three Democrats would send money each month to families when the national average for regular gasoline is above $4 a gallon. Under legislation proposed by Reps. Mike Thompson (D-Calif.), John Larson (D-Conn.), and Lauren Underwood (D-Illinois), eligible families below certain income thresholds ($150,000 for joint filers and $75,000 for single filers, much like the requirements for stimulus checks) would receive $100 per month, plus an additional $100 for each dependent.

The bill, called the Gas Rebate Act of 2022, refers to the money as “energy rebates” and “economic impact payments.” The latter is the official term for stimulus checks used by the IRS.

Some states are also trying to donate money to help residents pay their sky-high gas bills. Maine Governor Janet Mills recently amended the amount she wants to send to Mainers from $750 to $850 to account for inflation and rising oil and gas prices.

On Wednesday, California Governor Gavin Newsom launched a $11 billion relief package who would send payments of $400 per vehicle (capped at two vehicles) to families in his state via a prepaid debit card. The state would use vehicle registration records to determine who is eligible, and there would be no income cap “to include all Californians who face higher prices due to the cost of oil. “.

The average price of a gallon of gasoline in California is $5.88 on Thursday, according to Data from AAA. In Los Angeles, average prices topped $6 a gallon this week, a first for a major US city. In a press release, the Newsom administration estimated that the first payments could be made as early as July if the package is approved by the California legislature.

Lawmakers target big oil companies

Other lawmakers are targeting big oil companies like Shell and ExxonMobil, which have come under fire in recent weeks for keeping gas prices high even as crude oil prices have fallen.

A proposal, Rep. Ro Khanna (D-Calif.) and Sen. Sheldon Whitehouse (DR.I.), would use money from a new tax on oil and gas companies to send direct payments to Americans every quarter. The amount of the rebate would depend on the difference between the current price of a barrel of oil and the average price between 2015 and 2019. This rebate would be subject to revenue restrictions, and lawmakers estimate that if oil prices were around $120 a barrel (as they have been periodically lately), single filers could receive payments of up to $240, and joint filers could max out at around $360 over the course of a year.

Another one proposal targeting oil company profits was also launched by Rep. Peter DeFazio (D-Oregon). Money from the new tax would be paid to eligible Americans as a monthly reimbursement.

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States are also suspending gasoline taxes

Meanwhile, lawmakers in nearly a dozen states, including Maryland, Connecticut, Florida and Georgia, have proposed or already approved gas tax exemptions that would allow gas stations to service to temporarily stop collecting gasoline taxes and lower prices – at least a little. Gasoline taxes vary by state, ranging from about 15 cents per gallon in Alaska to 68 cents per gallon in California. Maryland and Georgia are among the states that have already adopted these holidays.

“This is of course not a panacea, and market instability will continue to cause price fluctuations,” Maryland Governor Larry Hogan said. tweeted last week, “but we will continue to use every tool at our disposal to help the people of Maryland.”

Six other Democratic governors have publicly backed a bill by two U.S. senators that would suspend the federal gasoline tax (which amounts to an additional 18 cents per gallon at the pump) until next year.

Will gas prices ever come down?

It’s hard to say if gasoline prices will return to normal anytime soon, especially as demand for fuel is still so strong.

For now, all direct payment proposals for high gas prices are just that – proposals. None have been signed into law, and it remains to be seen if that will happen.

Given that 2022 is an election year and the price of gasoline is an increasingly burning issue in the United States, it would not be surprising if lawmakers are particularly motivated to pass legislation that will undoubtedly be popular. with voters.

If you’re looking for ways to save money on gas while waiting, consider paying cash or opening a gas rewards card or grocery rewards program account.

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