Economy

Suspension of Gas Tax Unfortunately Fails Again

Written by Lev Finzi

California’s Republicans and a select few Democrats have tried and failed to get rid of the state’s gas tax. For the whole spring session, Assembly Republicans have been demanding that the state get the gas tax relief passed.

Gas prices have hit historic highs for the state, averaging out at about 6 dollars a gallon. Just over the past month, the price has gone up an estimated 47 cents. Governor Gavin Newsom and the majority of the Democratic party had said that it is in fact not the way to go to lower the gas prices. The Governor’s supposed plan has direct payments to registered drivers residing in the state of California. 

Instead of giving a tax break to California residents, the Gov. and other Democrats have made the point to instead give money directly to residents. Many have criticized the Democrats’ proposition, such as Erich Muehlegger, an Energy Economist at UC Davis. If taxes do end up being cut, “you tend to see most of those benefits, not necessarily all of those benefits, but most, going back to consumers in the form of lower retail prices,” said Muehlegger. 

This has been the second time that the Assembly Republicans have tried to get this act underway. Currently, each side has its own problems with this issue. Getting this off the ground has been proven to be difficult for the Republicans, while the Democrats struggle with the difficult choice to decide how much residents receive and who gets a direct check.

While the two sides disagree on who gets what and how to distribute said money, a bi-partisan group within the Legislature has decided to side with the republican perspective on this issue. On top of that, they have come up with a supposed solution for this tax issue. The solution they came up with had businesses that do not cut their prices amply after tax cuts suffer from being financially liable.