Stimulus checks for gas? Here's what could be coming your way.
Americans already faced searing inflation when gas prices surged to an all-time high earlier this month. Now, some lawmakers want the federal government to offer stimulus payments or rebate checks to help reduce the pain at the pump.
Families with two children could get as much $300 per month as long as the nation's average gas price exceeds $4 a gallon, according to one new bill proposed by Reps. Mike Thompson of California, John Larson of Connecticut and Lauren Underwood of Illinois. All three lawmakers are Democrats.
And on Wednesday, California Governor Gavin Newsom said he's proposing to send direct payments of $400 per vehicle to state residents, with a cap of two vehicles. Pending approval from California lawmakers, the checks could arrive as soon as July, the statement said. Drivers in California face some of the highest gas prices in the nation, with the state average at $5.87 per gallon on Wednesday, according to AAA.
American consumers could see increased costs of $2,000 this year due to the recent surge in gas prices — and that's on top of an extra $1,000 in grocery store costs due to the steepest rise in inflation since 1982. Already, consumers are reporting they are cutting back on spending or driving less, with most blaming sticker shock at the pump.
The gas stimulus would "provide middle-class Americans with monthly payments to ease the financial burden of this global crisis," Thompson said in a statement about the proposal, referring to Russia's invasion of Ukraine, which has pushed gas prices higher.
Currently, millions of Americans would qualify for the payments based on current gas prices, which averaged $4.24 a gallon on March 22, according to AAA.
While it's unclear whether any of the bills will move forward, the strain on American households caused by high gas prices is clearly on the minds of lawmakers. Here are how these proposals would work.
$300 a month for families
Called the Gas Rebate Act, the bill proposed by Thompson, Larson and Underwood would provide a monthly energy rebate of $100 per person. That refund would kick in for the rest of 2022 as long as the national average gas price topped $4 a gallon during any given month.
Under the bill, both joint and single tax filers would receive $100 each, while each dependent would also receive $100 each. In other words, a family with two kids could receive up to $300 a month in rebate checks.
The plan would work similarly to the three stimulus checks the federal government offered in 2020 and 2021 in that the payments would be aimed at low- and middle-class households. Single people earning less than $75,000 annually would receive the full $100 rebate, while the checks would be phased out for people earning up to $80,000.
Joint filers who earn less than $150,000 would qualify, with the payment phased out at up to $160,000 in household income, according to Thompson's statement. The proposal doesn't specify how the rebate checks would be paid for, and the text of the bill isn't yet published.
Rebates of $360 a year for families
A second proposal from Rep. Ro Khanna, a Democrat from California, and Sen. Sheldon Whitehouse, a Democrat from Rhode Island, would provide a quarterly rebate to consumers based on a tax levied on oil and gas companies.
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 to 2019, according to a statement from the lawmakers.
The two lawmakers calculated that if the per barrel price sits at $120, the tax would raise about $45 billion a year — providing single filers with $240 annually and joint filers with $360 each year.
"As Russia's invasion of Ukraine sends gas prices soaring, fossil fuel companies are raking in record profits. These companies have made billions and used the profits to enrich their own shareholders while average Americans are hurting at the pump," Khanna said in the statement.
Rebates based on oil company profits
A third proposal from Rep. Peter DeFazio, D.-Oregon, would create a rebate based on oil company profits. It's unclear how much Americans would receive because the plan is based on taxing this year's profits from oil and gas companies.
"My legislation would tax Big Oil's excess profits in 2022 and return the revenue back to Americans," DeFazio said in a statement about the bill, called the Stop Gas Price Gouging Tax and Rebate Act.
DeFazio pointed to a report from watchdog group Accountable.us that found that the largest oil and gas companies earned a record $205 billion in profits in 2021.
The Treasury Department would determine the tax credit amounts based on the revenue raised by taxing profits from oil and gas companies. The bill proposes that large oil and gas companies would pay a one-time 50% tax on any adjusted taxable income in 2022 that's above 110% of their average adjusted taxable income between 2015 to 2019, or the years prior to the pandemic, according to a statement from Rep. Underwood, who introduced the bill with DeFazio.
Like the federal stimulus checks, the rebates would have income limits. Single filers earning less than $75,000 and joint filers earning less than $150,000 per year would qualify for the payments.