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Will California get more inflation support payments?
As gasoline prices in the Golden State continue to rise, contrary to other trends seen around the country, Governor Newsom has proposed a windfall tax on oil and gas companies. The proposal would impose an additional tax on income earned beyond what was seen last year. This tax would take into account the increase in costs incurred by customers, and the total accumulated by the state would then be redistributed to drivers.
Newsom’s office released the plan after a report revealed that “California consumers paid $2.61 per gallon in gasoline prices more than the average price in the United States as of October 4, 2022.” The bureau even accused oil refiners of slowing production to create shortages that drive up costs.
“Five refiners—Chevron, Marathon Petroleum, PBF Energy, Phillips 66 and Valero—produce 97% of the state’s gasoline. They are able to restrict the supply of gasoline to drive up gasoline prices. They constantly restricted supply and artificially raised their prices far beyond their costs.
It’s unclear when the legislature will be able to vote on the bill, but many in the Golden State support the measure, as pump prices are reaching over $7/gallon in some areas. The division created by the windfall tax could help families next year, but for many the relief couldn’t come soon enough.
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