Gas prices in March reached record highs as the Russian invasion of Ukraine began to place major stress on international supply chains. Following the rapid increase in prices, inflation ticked up 1.2 percent as transportation costs across the market spiked.
Responding to these increases, various members of Congress introduced bills to send direct aid to families to bring down gasoline costs. California Congressman Mike Thompson, together with John Larson (CT-01), and Lauren Underwood (IL-14) released a proposal that would offer a $200 gasoline credit for $100 to qualifying households who live in areas where the average price of one gallon of gas is over $4.00.
“The Putin Price Hike is putting strain on our economy, and I am proud to be working with Reps. Larson and Underwood to introduce this legislation to provide middle class Americans with monthly payments to ease the financial burden of this global crisessaid Thompson.
At this point, the future of the bill is uncertain.
After the details of the proposal were made public, President Biden announced that the US would move to have one million barrels of oil released from the nation’s strategic reserves. The additional supply that has been flowing into the market has helped to bring down costs, supply chain disruptions batteryr, crude oil prices have started to increase once again.
Who would qualify?
Aside from the price requirement, single tax filers must make under $75,000 a year and those who are married must make under $150,000 to receive the full benefit. Those who make over these limits are still able to claim some benefits but at $80,000 (single) and $160,000 (married), the payments would be phased out.
Gas profit rebates
the Stop Gas Price Gouging Tax and Rebate Act, introduced by Congressman Peter DeFazio would implement “a windfall profit tax on excessive corporate profits and return the revenue to American consumers in the form of a tax rebate.”
Last quarter, all major gasoline companies recorded high profits, much greater than was seen over the same period last year. The companies include BP ($4.6 billion), Chevron ($6.26 billion), Shell ($9.13 billion), and Exxon Mobile ($5.5 billion).
The profits over made by these companies in 2022 that exceed 110 percent of their average from last year would be taxed at a rate of fifty-percent. The bill would only apply to profits this year after speculation that many big oil companies are taking advantage of the market impacts the Russian invasion of Ukraine are having. The funds collected by the IRS would be redistributed to tax payers in the form of a rebate next year.
These companies have claimed that they are struggling and asked the federal government to grant them more drilling permits to increase supply. However, the process under which a study is done to determine how much oil could be extracted in a certain area and building the infrastructure needed to extract, take time. It is unlikely that this would be effective as a short term policy solution† Additionally, after the high profits seen over the last year, many Democrats are skeptical that these companies are in need of the additional resources that federal government could provide.