Some experts believe Gov. Gavin Newsom's strategy to cut California's high gas costs will backfire and worsen inflation.
Many Californians were relieved to learn that Newsom has proposed a new plan to help alleviate the state's increased gasoline prices.
All Californians would receive a $400 tax return in the form of a debit card for each vehicle they own, up to a maximum of two vehicles, as part of the proposed $11 billion relief package. There was also no income cap included in the proposal.
"That direct relief will address the issue that we all are struggling to address, and that's the issue of gas prices," Newsom said in a Twitter video. "Not only here in our state, but of course, all across this country."
However, according to Fox Business, some experts believe Newsom's plan won't do well for the current inflation. GasBuddy's head of petroleum analysis, Patrick De Haan, seems to take issue with Newsom's plan.
"Newsom wants to swell California gasoline demand at a time of refinery challenges and high prices. This will end badly," he warned on Twitter. "Politicians must resist the urge to get in the middle of markets and let it run its course."
In a later tweet, De Haan stated that while he, like many other Americans, despises the high price of gasoline, giving out gas cards and tax breaks is equivalent to presenting a bottle of Jack Daniels to someone who is already inebriated, and "it enables high prices and high demand."
Despite this, a growing number of states are following California's lead.
Georgia Gov. Brian Kemp signed a state income tax return bill into law earlier this week, with households receiving payouts ranging from $250 to $500. Meanwhile, Gov. Tim Walz of Minnesota is urging lawmakers to adopt $500 rebate payments for single filers and $1,000 payouts for couples.
Georgia and Maryland, not to be outdone, were the first states to suspend their gas taxes. Similar legislation is being considered by lawmakers in Illinois, Massachusetts, Maine, Michigan, New York, Tennessee, and Virginia.
Proposals are also being made at the federal level. Representatives Mike Thompson (D-Calif.), John Larson (D-Conn.), and Lauren Underwood (D-Ill.) have introduced the Gas Rebate Act, which aims to provide a $100 energy rebate every time gas prices rise beyond $4 per gallon in any month for the rest of the year. Individuals would also be paid $100 for each dependant.
