Gas Stimulus Checks to Americans: Push for Payment Continues

Published on

Gas prices in the U.S. have dropped since peaking at $4.33 in March. However, the prices are rising again, with average prices for a gallon of gas currently at $4.19, up from $2.90 a year ago. Thus, several lawmakers have come up with proposals to provide gas stimulus checks to Americans. One such proposal comes from Democratic Rep. Ro Khanna of California, and the proposal aims to tax major oil companies to send gas stimulus checks to Americans.

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q1 2022 hedge fund letters, conferences and more

Gas Stimulus Checks To Americans

Ro Khanna and Sheldon Whitehouse of Rhode Island first introduced the proposal, called the Big Oil Windfall Profits Tax, to give gas stimulus checks to Americans in March this year. The proposal plans to tax major oil companies “equal to 50% of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel between 2015 and 2019.”

Khanna, who continues to push the proposal, recently told USA Today that at $120 per barrel of oil, his proposed tax would raise about $45 billion per year. Such a collection could give $240 to single tax filers and about $360 to joint filers.

Though the proposal seems promising, it hasn’t got much support. “We haven't, unfortunately, got Republicans on board with it yet,” Khanna said.

Instead of sending gas stimulus checks to Americans, several Republican lawmakers are in support of expanding the Keystone XL pipeline. Advocates claim that such a move would reduce the gas prices, as well as help the country become even more energy independent.

Those against expanding the Keystone XL pipeline claim that the construction process could take years and there is no surety that the project would boost U.S. supplies. President Joe Biden has halted the expansion of the Keystone XL pipeline citing environmental concerns.

Other Similar Proposals

Apart from Khanna’s Big Oil Windfall Profits Tax proposal, there are more proposals that aim to send gas stimulus checks to Americans.

For instance, Mike Thompson (D-California), John Larson (D-Connecticut) and Lauren Underwood (D-Illinois) have proposed the Gas Rebate Act of 2022. Under the proposal, $100 per month would go to adults and dependents for each month in 2022 that the national average gas price exceeds $4 a gallon.

Single filers with income less than $75,000 per year (less than $150,000 for joint filers) would be eligible for the payment. The payment would phase out at $80,000 or more ($160,000 or more for joint filers).

Another similar proposal comes from Rep. Peter DeFazio (D-Oregon) to offer a rebate based on oil company profits. DeFazio’s proposal, called the Stop Gas Price Gouging Tax and Rebate Act, would offer rebates through taxing this year’s profits on oil and gas.