The nation's gas crisis is taking a heavy toll on California residents who pay $1.20 more per gallon than other states, primarily due to added taxes.
On Wednesday, Governor Newsom unveiled a plan to help California residents burdened with the high cost of gas, including refunds of $400 per registered vehicle, free public transit, and halting the .51 cent tax scheduled to go into effect this summer. A number of gas rebate plans were also announced at the federal level.
At the state level, Governor Newsom's plan includes:
- Refunds of $400 per registered vehicle (up to two vehicles per person) would be issued to California residents, at an estimated cost of $9 billion dollars. Electric vehicle owners would be eligible for the refund, but businesses with fleets of vehicles would not.
- $750 million in grants that would be issued to cover the cost of free public transit for up to three months.
- $523 million would be allocated to halt the .51 cent tax increase scheduled to go into effect this summer.
- An additional $600 million would be paid to suspend a portion of sales tax on diesel fuel for one year.
In a Tweet on Wednesday, Governor Newsom said, "We’re proposing $9 billion in tax refunds to address rising gas prices -- $400 per registered vehicle, up to 2 per person. We’re also proposing grants so public transit can be free for 3 months. We know Californians are paying at the pump & with this refund, millions get $ back."
Newsom's plan will need to be approved by the Legislature. It already faces opposition from Democrats who don't support the temporary gas tax halt and don't believe that wealthy Californians should be eligible for the refunds.
If approved the receive the money in the form of debit cards as soon as July.
On the national front, multiple proposals are on the table.
The Gas Rebate Act (Federal)
- Under this plan Americans would receive an energy rebate for each month that the national gas price exceeds $4 per month.
- The rebate would be $100 per month for individuals (earning up to $75,000 annually) or $200 for couples (earning up to $150,000 annually). An additional $100 would be added for each dependent.
- Authored by Reps. Mike Thompson of California, John Larson of Connecticut and Lauren Underwood of Illinois.
Stop Gas Price Gouging Tax and Rebate Act (Federal)
- This measure would provide American families with a monthly tax credit that would be funded by a one-time tax on oil companies.
- The plan's author, Oregon Rep. Peter DeFazio said" Big Oil will pay a one-time, 50 percent windfall profit tax on any adjusted taxable income (ATI) in 2022 that exceeds 110 percent of their average ATI during pre-pandemic levels between 2015-2019."
Big Oil Windfall Profits Tax (Federal)
- Similar to the "Stop Gas Price Gouging Tax" proposal, California Rep. Ro Khanna and U.S. Sen. Sheldon Whitehouse of Rhode Island's plan calls for a quarterly rebate to Americans funded by tax on domestically and internationally produced barrels of oil.
- Based on an oil price of $120 per barrel, Khanna estimates that individuals would receive approximately $240 a year, and couples would receive approximately $360 a year.