California drivers with the highest gas prices in the nation’s shoulders could soon receive a tax break, free public transportation and up to $ 800 debit cards to help pay for fuel – but economic experts warn it will go up inflation even more.
The proposal was unveiled on Wednesday by Gov. Gavin Newsom, as gas prices continue to rise in recent weeks due to pandemic-induced inflation and Russia’s invasion of Ukraine.
“That immediate relief will address the issue that we are all struggling to address and that is the issue of gas prices,” Newsom said in a video posted on Twitter this week.
State governments across the country are having debates over what to do about it, with the most popular choices being to reduce fuel taxes or offer discounts to taxpayers.
Last week, Maryland and Georgia governors signed laws temporarily suspending their state’s gas taxes, while Georgia also offered $ 1.1 billion in refunds to taxpayers in a separate action on Wednesday.
California’s average gas prices hit a new state record on Wednesday at $ 5.88 per gallon, more than $ 2 higher than it was a year ago, according to AAA.
California has the second-highest gas tax in the country at 51 cents per gallon.
Gov. California Gavin Newsom has suggested giving people $ 800 debit cards as bus transportation, as average gas prices hit a new state record on Wednesday at $ 5.88 per gallon
California average gas prices hit a new state record of $ 5.88 per gallon on Wednesday, more than $ 2 higher than a year ago, according to AAA
California has the second-highest gas tax in the country at 51 cents per gallon
A graph shows how the average cost of gas in California compares to the national cost
But the state’s Democratic leaders have warned against stopping the gas tax because they fear oil companies will not pass on the savings to drivers.
Instead, they want to send money directly to taxpayers.
The governor’s office says the average California driver spends about $ 300 a year on gas taxes. Newsom’s idea is to give car owners $ 400 debit cards for up to two cars, for a total of $ 800.
The money would go to anyone who has registered a car with the state – including the uber-rich, people who live in the country illegally, and even drivers who own cars that do not use gasoline.
For people who do not have a car, Newsom wants the state to pay for their bus or train traffic for three months.
His proposal would give $ 750 million to transit and rail agencies, which Newsom said would be enough to give free rides to 3 million people a day.
About $ 1.1 billion would pay to stop planned inflation increases for diesel and fuel taxes this summer, and another $ 500 million would pay for projects that promote cycling and walking.
“That immediate relief will address the issue that we are all struggling to address and that is the issue of gas prices,” Newsom said in a video posted on Twitter this week
“This package is also aimed at protecting people from volatile gas prices, and promoting clean transportation,” Newsom said.
Rising fuel prices are a difficult policy issue for Newsom, which is trying to deplete the state of fossil fuels. He has signed executive orders aimed at banning the sale of new gas cars in the state by 2035 and stopping all oil production by 2045.
He has proposed a total of $ 10 billion in funding over six years to stimulate the production of zero-emission cars and build charging stations.
Higher gas prices usually inspire people to be more mindful of their car use by walking more or eliminating unnecessary car travel, said Laura Deehan, California State Director, a nonprofit advocating an end to fossil fuel use .
Giving people money for gas would encourage them to drive more, she said.
The proposal was unveiled on Wednesday by Gov. Gavin Newsom, as gas prices continue to rise in recent weeks due to pandemic-induced inflation and Russia’s invasion of Ukraine
The national average price of gas reached a record high of $ 4.43 on March 12
Inflation in the United States reached a new 40-year high of 7.9% in February in another grim signal to consumers
Instead, she said Newsom should spend the $ 9 billion on programs aimed at getting people out of gas-gold cars.
“Issuing these discounts to anyone who owns a car in the state alone will not help us in the long run to move away from the volatility that comes with our dependence on fossil fuels,” she said.
Newsom’s plan must be approved by the Legislature, where Democrats dominate both the Assembly and the Senate. However, democratic leaders do not like the idea of giving money to rich people.
They discussed their own rebate proposal, one that would give $ 200 rebates to each taxpayer and their children with taxable income of less than $ 125,000 for single filers and $ 250,000 for common filers. That means a family of five would get $ 1,000, while a single parent with two children would get $ 600.
“The Senate is committed to ensuring that state funds are directed to those who actually need relief and we look forward to working with Gov. Newsom, Speaker Rendon and our legislative colleagues to quickly develop a proposal that delivers for the struggling Californians, “said state Senate President Pro Tempore Toni Atkins, a Democrat from San Diego.
Above is a chart for US crude oil imports, which excludes other petroleum products.
The president pointed out in his speech that the US produced more oil in his first year in office than in Donald Trump’s first year in 2017.
A spokesman for the Democratic Assembly Speaker Anthony Rendon called Newsom’s idea ‘consistent with the Speaker’s goal of providing targeted financial assistance to Californians who are most in need’ but stressed that the idea ‘in’ it is very early stages’.
Newsom’s plan is similar to a separate proposal passed last week by more moderate Democrats in the state legislature that would give any taxpayer $ 400, regardless of income.
Assemblywoman Cottie Petrie-Norris, a Laguna Beach Democrat who supports the plan, called on the legislature and Newsom on Wednesday to act quickly.
“The contours of the governor’s proposal are a little different from what we proposed, but I would be very happy to support this,” she said.
The governor’s office said Newsom would be willing to negotiate with lawmakers over who could get the money, a process that could take some time to sort out.
Republicans favor a temporary suspension of the state’s gas tax, saying it’s the quickest way to provide relief.
Discounts like the ones Newsom proposes take time to deliver, with the governor’s office allowing people to see the money in July.
“People need relief now,” said Republican leader James Gallagher. ‘We now have, like, four different competing plans among the Democrats. These guys will be negotiating against themselves for weeks to months and who knows what we’ll get. ‘
The last time inflation was at 7%, Reagan was new in office and the ‘Great Inflation’ ends
The period of ‘Great Inflation’ from 1965 to 1982 was marked by rising inflation which in 1980 reached 14 percent.
The new data set inflation at its highest level since 1982, when the period known as the ‘Great Inflation’ came to an end.
Encouraged by failed monetary policy and two oil crises in 1973 and 1979, the period from 1965 to 1982 was marked by rising inflation which in 1980 rose 14 percent above.
Consumers were suffering greatly from rising prices, and the scandal surrounding the inflation crisis contributed to Ronald Reagan’s victory over incumbent President Jimmy Carter in 1980.
“Inflation is as violent as a robbery, as horrific as an armed robber and as deadly as a hit man,” Reagan said famously on the campaign trail, dedicating the first years of his presidency to tackling the problem.
Reagan’s controversial economic policies had four key pillars: reducing government spending, cutting taxes, reducing regulation, and tightening monetary supply through higher interest rates.
Naysayers required then that Reagan’s policies would drive prices even higher, but history proved them wrong and inflation was soon returning to sustainable levels.
Gov. Gavin Newsom proposes giving California car owners up to $800 for gas Source link Gov. Gavin Newsom proposes giving California car owners up to $800 for gas