High gas prices give rise to calls for tax cuts, stimulus checks
High gas prices give rise to calls for tax cuts, stimulus checks

High gas prices give rise to calls for tax cuts, stimulus checks

“The 360” shows you different perspectives on today’s top stories and debates.

What happens

Gas prices has increased since the beginning of Russia’s invasion in Ukraine, which adds extra pressure to consumers who are already handling higher costs of the pump after a year of rapid inflation.

In response, the Biden administration has aggressively explored ways to compensate for the loss of Russian oil imports that the United States banned last week. Most experts, however, say the president cannot do much to reduce gas prices significantly in the short term. Despite Republican calls to increase drilling in the United States, economists say it restrictions on domestic production is mostly market-driven and that it would take months for new wells to start producing enough oil to affect supply levels. At the same time, green energy solutions, which many Democrats advocate, are generally seen as a long-term means of reducing dependence on oil rather than a viable replacement in the immediate future.

With limited opportunities to address the underlying supply problems, lawmakers have proposed a number of potential ways to help Americans bear the burden of rising fuel costs. Maryland’s governor and state legislature have agreed on one temporary suspension of state gas taxes, an idea that has been presented in several other states and at the federal level. California Governor Gavin Newsom recently hovered the idea of ​​a tax rebate “putting money back in the pockets” of people struggling to afford high fuel costs. Some progressive Democrats have proposed creating one new system with regular stimulus checks financed by a high tax on the profits of the oil companies.

Why there is debate

Each of these proposals has different proponents and opponents. However, there is general agreement that some of them would mostly help along the margins, but that real relief for consumers will not come until gas prices fall.

The logic behind a gas tax vacation is simple: If you do not put extra taxes on top of the underlying costs, gas will be cheaper. The federal gas tax is about 18 cents per. gallon, and state taxes range from 17 cents to 51 cents per. gallon. But skeptics say it is not certain that these savings will be passed on to consumers, rather than to the oil industry and gas stations. There is also concern that a tax holiday would erode funding from critical government programs, such as motorway renewal projects.

Proponents of a direct stimulus, either through rebates or checks funded by taxing oil companies’ profits, say this option is the best way to ensure the money goes directly to the people hardest hit by rising gas prices. Skeptics argue that any plan that discourages investment in oil production will only make the shortage of supply last longer.

Some environmentalists reject all these ideas because they claim that each of them represents a step back from the ultimate goal of stopping the dependence on fossil fuels. Many say the best way to help Americans endure high gas prices is to do everything possible to limit how much people need to drive in the first place.

What’s next

With so much uncertainty surrounding the oil supply chain, experts are wary of making predictions about how high gas prices will rise and when they may start to fall. Most people expect an increase in fuel costs heading into the summer months, but many factors – including the possibility of peace in Ukraine or another major wave of COVID-19 – could bring them down again.

Perspectives

A gas tax holiday may be the only realistic option to lower prices right away

“If the fossil fuel companies could somehow get Putin to end his war in Ukraine and end the sanctions against Russia, which would free up the country’s ability to sell crude oil, then Big Oil must by all means, state. “But they do not have that ability, and gas prices are determined by the global cost of crude oil. What is possible? To suspend the gas tax.” – Editorial, Boston Herald

Funds from gas taxes are too important for the nation’s long-term goals

“The federal gas tax is a critical, but increasingly weak, policy that Congress should strengthen, not undermine.… Suspending the gas tax would be another step toward breaking the link between how much people use the roads and what they pay to maintain. “One side effect would be more driving – and more wear and tear on the country’s infrastructure. Another would be more greenhouse gases in the atmosphere.” – Editorial, Washington Post

Reducing corporate greed will help prevent prices from rising unnecessarily

“Why are petrol prices rising? Oil company[ies] is engaged in an orgy of profit hunting. W h[ile] Working-class Americans struggle to pay at the pump, large oil revenues rise. “- The Nation, John Nichols

Taxing profits would only make price increases even more serious

‘Gas prices are already outrageously high. Imposing new taxes on oil companies increases their costs – and as ECON 101 teaches us, it’s a textbook recipe for a drop in supply. When supply falls, prices rise even more! “- Brad Polumbo, Washington Examiner

Tax rebates can help Americans bear rising costs for everything, not just gas

“A tax rebate is a good idea, but it should be widely used to help all Californians who are having a hard time. Call it the gas and grocery discount, and everyone should be able to stand behind it. ” – Editorial, Los Angeles Times

Keep it simple, and just send people money

“Families need help now. The fastest and most effective way to protect vulnerable citizens from the effects of global economic instability is to provide a direct payment through the IRS, similar to the three stimulus checks sent to families during the peak of the pandemic.” In contrast to stimulus control, these payments should be targeted directly at low- and moderate-income families. ” – Mark Wolfe, CNN

High gasoline prices are actually good

“Higher prices at the pump encourage people to drive less and buy more electric and fuel-efficient cars. Reducing fossil fuel consumption and reducing greenhouse gas emissions should remain one of the state’s highest priorities. The price we pay for the impact of climate change Is much higher than the increased costs at petrol stations. ” – Editorial, San Jose Mercury News

Lawmakers should not ignore the demand side of the equation

‘Demand is going down. Now. … There are simple measures to take: Reduce speed limits on motorways; ask consumers to turn down their thermostats; encourage the use of public transport by reducing fares or letting people drive for free on weekends. “- Javier Blas, Bloomberg

Democrats should not force bad policies through because of political pressure

“Therapists advise against making big decisions when you are very emotional. Democrats should follow this advice and stop proposing hasty ways to lower gas prices. “- Rick Newman, Yahoo Finance

The sad truth is that there are no quick fixes

“Democrats trying to find a quick fix – like a proposed gas tax holiday – will find that they are also unlucky. The biggest problem is not the domestic supply of oil or the taxes paid. That’s how much Americans love and expects cheap gas, a problem that the United States has only encouraged as a car-centric society. ” – Hayes Brown, MSNBC

The government should do everything it can to get people to drop their cars

“Here’s something he could do: Pay people to get rid of their cars. ‘ our cars – but it’s surprisingly achievable. ” – Alissa Walker, Dammed

Is there a topic you would like to see covered in “The 360”? Send your suggestions to [email protected]

Photo illustration: Yahoo News; photos: David Crane / MediaNews Group / Los Angeles Daily News via Getty Images


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