A group of Democratic state legislators on Thursday proposed sending all California taxpayers a $ 400 tax rebate check to lessen the economic pain they suffer from gas prices and rising daily commodity costs.
But it’s by no means a finished deal, so don’t expect to see any checks with the mail next week.
Here’s what’s known so far:
Who would receive tax rebates and when would they be sent out?
All Californians who pay state income tax will receive a $ 400 rebate, regardless of their income. So in theory, billionaire Facebook co-founder Mark Zuckerberg and the manager of your local In-N-Out would both receive a $ 400 discount. Because the payments would be sent to each taxpayer, married couples would receive $ 800.
Assemblyman Cottie Petrie-Norris (D-Irvine) said the rebates should be issued as soon as possible and that the state should not wait until Legislative Assembly and Governor Gavin Newsom agree on the entire state budget, which is traditionally closed at the end of June.
“Our goal is to be able to do this in the spring, and all the people here are going to push really, really hard to make it happen,” Petrie-Norris said at a news conference Thursday outside the state Capitol.
Petrie-Norris said the intent of the group of Democratic lawmakers – which included moderate lawmakers – was to provide as much relief as possible to as many Californians as possible. But she acknowledged that decisions about who would receive a rebate and how much they would receive will be hashished in negotiations with the legislature and the governor.
Assembly Republican leader James Gallagher of Yuba City said he supports the proposed tax rebates, especially since the Newsom administration expects a $ 45 billion budget surplus. Gallagher also wants to suspend the state’s gas tax.
“There’s an urgent need right now with the high costs across the board, not just gas, but all of our daily living costs have risen. People need relief now,” Gallagher said.
Why $ 400?
Petrie-Norris said the $ 400 tax rebate was used because it equates to the amount a typical Californian pays in state excise taxes on gasoline per year. She said California drivers on average fill up their gas tanks 52 times a year. California’s highest gas tax is 51 cents per gallon. gallon.
“It’s a year-long gas tax vacation,” she said.
Why not just cut down on the state’s gas tax?
Republican lawmakers are pushing for a six-month suspension of the state gas tax, arguing it would be the most effective way to provide direct economic relief to Californians who thrive under high gas prices.
“The thing about a gas tax suspension is that it’s obviously aimed at people who feel the pain,” said Assemblyman Kevin Kiley (R-Rocklin). “People who drive the most because let’s say they live in a rural area, or maybe have to commute a long distance to work, or maybe they have more children, they have to drive to school, the benefit will be commensurate with the pain that they feel right now.”
Kiley’s bill to suspend the gas tax failed in the Democratic-controlled state assembly on Monday, though the legislature said it plans to force another vote on the bill next week.
Assembly Speaker Anthony Rendon (D-Lakewood) and Senate Speaker Tem Toni Atkins (D-San Diego) have said a reduction in the gas tax would jeopardize critical repair work being carried out on California’s crumbling roads, bridges and other major transportation projects. They also said it would not provide significant financial assistance to Californians.
Both the governor and the Democratic legislators also said that there is no guarantee that the oil companies would lower gas prices if the tax is suspended, companies are warned that they can put the savings in their pockets instead of passing them on to the drivers at the pump.
Kiley dismissed it as political gambling. He noted that Democratic Gov. Ned Lamont of Connecticut called on lawmakers in his state to suspend one of two taxes on gasoline by 25 cents a day. gallon until the end of June. Kiley also noted that the non-partisan Legislative Analyst’s Office said in a report from February that a cut in California’s gas tax would save drivers money when they had to fill up.
“Available evidence suggests that lower excise duties are likely to result in lower retail prices. The exact effect on retail prices is uncertain, but most of the change in the tax rate is likely to be reflected in prices at the pump,” the report said.
What are the odds that a $ 400 tax rebate will pass?
It is clear that the governor and both Democratic and Republican leaders in the Legislature want to provide tax relief for Californians hard hit by high gas prices as well as rising costs for food, housing and other daily necessities. Due to the give-and-take of most spending negotiations in Sacramento, the odds are that the proposed $ 400 tax rebate will not pass as it is.
Newsom and the Legislature’s Democratic leadership continue to negotiate the best ways to help alleviate the financial pain of the gas pump, and some of the ideas that have been discussed include sending tax rebates to Californians with registered cars and issuing stimulus checks. In its budget proposal for January, Newsom called for the cancellation of an increase in California’s gas tax, scheduled for July, indicating that he is not completely opposed to tinkering with state fuel taxes.
A tax rebate or incentive can also be tailored to Californians who are most in need. In response to the COVID-19 pandemic, the governor and legislature approved a “Golden State Stimulus” program that sent out $ 600 checks to residents earning up to $ 75,000 a year.