As Gas Prices Continue to Rise, Lawmakers Are Pushing for More Direct Payments to People in the U.s.
Over the previous few months, the rising rate of inflation has taken a huge toll on Americans. One of the most serious consequences of inflation is that paychecks aren’t stretching nearly as far as they should be.
This is due to inflation, which affects the cost of everything from groceries to a gallon of gas, which touched an all-time high of $4.33 per gallon this past March.
This has put a lot of strain on the money in Americans’ bank accounts. And, while last year’s increased Child Tax Credit payments helped millions of low- to moderate-income families get by, there are now no more monthly tax credit payments on the horizon.
After failing to achieve an agreement on an extension, lawmakers allowed the expanded benefits to expire in 2021.
The good news is that another sort of financial assistance may be on the way in the near future. The Gas Rebate Act and the Stop Gas Price Gouging Tax and Rebate Act were recently filed by congressional politicians, and both offer direct payments to Americans to assist alleviate the burden of rising gasoline prices.
Here’s what each bill is about, how much it would be worth to your pocketbook, and who might be eligible for payouts if it becomes law.
The Gas Rebate Act: What You Should Know
What it entails: Reps. Mike Thompson, John Larson, and Lauren Underwood introduced the Gas Rebate Act earlier this year to address the high gas prices that Americans are encountering at the pump.
If implemented, the Act would provide Americans with a monthly energy rebate, allowing them to better afford the high gas prices at the pump.
The energy refund would be given out each month to qualifying Americans, similar to the direct payments that were issued as part of the expanded Child Tax Credit.
What it may be worth: Each qualifying adult could receive a $100 monthly energy rebate. Households that meet the criteria could get an additional $100 per month for each dependant. The Act’s direct payments would be sent monthly through 2022, assuming that national average gas prices remain over $4 per gallon.
Who would be eligible: As previously stated, the proposal’s pricing criterion would limit payouts to just those months when average petrol prices are $4 per gallon or more. If average monthly prices fall below $4 per gallon, no payments will be made for that month.
There would be an income criterion in addition to the price requirement to qualify. To be eligible for this proposed gas refund, you must earn less than $75,000 per year as a single filer. To receive the entire monthly payment if you are married and file jointly, you must earn less than $150,000 per year.
If the bill is passed, you may be eligible for some direct payment benefits if your yearly income is somewhat higher than the $75,000 limit. Payments would phase off entirely at $80,000 for solo filers and $160,000 for married couples filing jointly.
The Stop Gas Price Gouging Tax and Rebate Act: What You Should Know
What it entails: Congressman Peter DeFazio presented the Stop Gas Price Gouging Tax and Rebate Act in March to assist Americans in better afford the cost of gas. The purpose of this Act is to enact “a windfall profit tax on excessive corporate profits, with revenue returned to American consumers in the form of a tax rebate.”
The concept behind this Act is that many of the large oil firms are profiting from the market impact of Russia’s invasion of Ukraine, which has resulted in higher gas prices.
As a result, when big gas companies’ profits exceed 110 percent of the previous year’s average profits in 2022, the law proposes that they be taxed at a significantly higher rate.
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When significant oil profits hit the bill’s “tipping point,” the businesses would be taxed at a 50% rate. The IRS would collect this cash, which would subsequently be paid to Americans as a tax refund the following year.
What it could be worth: It’s unclear to say how much the tax hike on big oil firms will benefit Americans. The tax rebates would be proportional to the amount of income collected from the increased tax, and profits would have to rise by more than 110 percent to justify the higher tax rate.
While the exact amount of the prospective tax rebate is unknown, it is certain that Americans would not have to wait until tax season to get the funds.
According to the law, the windfall profit tax income would be returned to Americans in the form of a monthly, advanced, and refundable tax credit, similar to the monthly Child Tax Credit payments that began in 2021.
Who would be eligible: This tax rebate, like most other stimulus programs, would be phased off based on income. According to the law, the eligibility requirements for the tax rebate would be the same as those for the economic impact payments included in the American Rescue Plan.
What are the next steps for these two bills?
The future of any bill is still unknown. Both plans are in their infancy and are expected to face considerable roadblocks as they progress through the correct processes. It remains to be seen whether they can overcome these obstacles and be signed into law.