Sacramento Sends Californians Stimulus Checks Ahead of Fall Election; Newsom Vows To Punish Oil Companies With ‘Windfall Tax’
Sacramento’s elite are desperately hoping that Californians won’t notice inflation, taxes, or the gas prices.
Ahead of the November election, Sacramento decided to try and mitigate some of the damage being done to the Democratic Party brand between gas prices and inflation.
State politicians are sending out stimulus checks to Californians.
Up to 23 million California residents are about to receive tax refunds of as much as $1,050, thanks to one-time stimulus payments the Golden State began deploying Friday.
The payments, which will total $9.5 billion, mark the largest program of its kind in the state’s history.
The initiative, dubbed the Middle Class Tax Refund, comes as inflation nationally has reached historic highs. California had a record $97.5 billion surplus as it finalized its budget including the payments earlier this year.
“We know it’s expensive right now, and California is putting money back into your pockets to help,” California Gov. Gavin Newsom, a Democrat, said in a statement.
“We’re sending out refunds worth over a thousand dollars to help families pay for everything from groceries to gas,” he said.
However, some of that money is going to be going right back to Sacramento. The State of California has quietly raised its marginal income tax rate to 14.4% beginning in 2024.
It’s hard to keep track of the bad policy emanating from California nowadays, and maybe that’s what Gov. Gavin Newsom was hoping when he signed legislation on Friday that raises the top marginal income-tax rate on the sly. High earners won’t know what hit them until it does.
The bill funds an expansion of the state’s paid family leave benefit by removing the $145,600 wage ceiling on the state’s 1.1% employee payroll tax. Workers can currently receive a 60% to 70% wage replacement to take up to eight weeks off to care for a new baby or sick family member. Starting in 2025, they will be eligible for between 70% and 90% of wages, more for lower earners.
The 1.1% payroll tax had been limited to $145,600 in wages since benefits are capped at $1,540 a week. That means high earners don’t receive a commensurately larger benefit. But in progressive fashion, Democrats are removing the tax ceiling and dunning higher earners to pay for a benefit expansion that will mainly benefit lower earners.
This means that in 2024 California’s top marginal tax rate will increase to 14.4% from 13.3% for workers making more than $1 million. Those making between $61,214 and $312,686 would pay 10.4%. So California’s upper-middle class will pay more than millionaires in almost every state save New York, New Jersey and Hawaii.
The stimulus checks will also be for gas, as California’s average gas price is $6.42 a gallon – far above the national average of $3.86. Newsom is blaming the oil companies, and plans on nailing them with a “windfall tax.”
Gov. Gavin Newsom will call state lawmakers back to Sacramento for a special session in response to rising gas prices.
The session will take place on Dec. 5.
The governor has requested the Legislature approve a measure that would require oil companies to pay back excessive profits to consumers through a new tax. The Legislature finished policymaking for the year on Aug. 31 and can’t begin action on proposals until January, unless the governor calls the special legislative session.
Newsom said Friday he chose Dec. 5 because that is when the Legislature was already scheduled to reconvene briefly to swear-in new members. He said his office wants time to make sure the proposal is on solid, legal ground.
There are many reasons this idea is full of fail.
Phil Flynn, a FOX Business contributor and senior market analyst at the Price Futures Group, said such a windfall tax would “further discourage investment in an industry that is desperately in need of capital to stay in business in an increasingly hostile governmental environment.” he said.
..”There’s this false perception – created in part by politicians – that somehow energy companies are making too much money,” Flynn told FOX Business. “The truth is their profits are higher than they have been in the past, but they fail to put it into the perspective of how much these companies have to invest to bring supply to the marketplace, and it fails to take into account the government regulations that have restricted supply that have caused the prices to go higher as well. It also doesn’t take into account that most of these energy companies in the past were losing money just a few years ago.”
Flynn told FOX Business the windfall tax Newsom called for is a “tool to shift blame” onto oil companies “that are just trying to do their job and keep the market well supplied.” It would restrict supply and make prices rise in the long run, he said.
As noted, it is difficult watch a state commit suicide. It’s a lot harder when you are a resident of that state.
Gov. Newsom will call a special legislative session to impose a windfall tax on oil companies https://t.co/CPhJgwt04s
— Anas Alhajji (@anasalhajji) October 7, 2022
Sacramento’s elite are desperately hoping that Californians won’t notice inflation, taxes, or the gas prices, but voters in the rest of the country probably do and are likely to vote their pocketbooks.DONATE
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