About a dozen states are proposing to send tax rebate checks to their residents to offset the highest inflation in four decades, with lawmakers on both sides of the aisle pointing to high gas and food prices as a motivation for their actions.
Among them is Georgia Gov. Brian Kemp, a Republican who signed a law on Wednesday to send checks of up to $ 500 to residents of the state. The reason, he said in a statement, is to soften the impact of inflation on family budgets, and also return some of the money amid a record state budget surplus.
Two years ago, the pandemic was expected to wreak havoc on state budgets, but many states, meanwhile, are enjoying a rebound in tax revenue due to the economic recovery. Workers are recovering jobs, boosting income taxes, while strong retail sales are raising sales taxes. From April 2021 to January 2022, total state-adjusted inflation-adjusted tax revenues rose more than 19% compared to the same period last year, according to a recent report from the Urban Institute.
These checks represent unique tax rebates that will return the money to the consumer’s portfolio. But some other states are thinking or already planning to do so cut income taxesoffering a continued tax cut to its residents.
Tax cuts and cuts crossed party lines, with Democrats and Republicans joining the proposals.
In Maine, Democrat Gov. Janet Mills wants to send $ 850 checks to each resident to offset inflation, including high gas prices, which is one of the council’s most generous offers. The rebate “will help the people of Maine cope with these increased costs by putting money right back in their pockets,” Mills said.
However, discount checks are unlikely to cover the rising costs faced by most Americans, as states typically offer multi-hundred-dollar checks, while the average family will pay a estimation. $ 2,000 in additional costs this year only by rising gas prices.
Wendell Cressey, a clamdigger in Harpswell, Maine, said raising the cost of fuel for people in his business means the check will only provide temporary relief.
“It might help a little bit, but it should be a lot more because we’re paying for gas. Most of us have V-8 trucks,” Cressey said. “I just don’t think it helps as much as they think it does.”
Not all states propose tax breaks that work smoothly. Vermont Gov. Phil Scott, a Republican, has proposed returning half of a $ 90 million surplus from the State Education Fund to state-owned taxpayers with a check for between $ 250 and $ 275. but the Democratic-controlled legislature has shown little interest.
“Normally, when you overpay for something, you get some of that money,” Scott said when he made the proposal earlier this month.
The following are the states with discount checks in progress:
California
On Wednesday, California Gov. Gavin Newsom, a Democrat, said he proposed sending direct payments of $ 400 per vehicle to residents of the state, with a two-vehicle limit. Pending approval by California lawmakers, the checks could arrive as early as July, according to the statement. California drivers face some of the highest gasoline prices in the country, with the state average of $ 5.87 per gallon on Wednesday, according to AAA.
Georgia
Gov. Kemp on Wednesday signed a bill that will send bonuses to taxpayers who have filed returns for both 2020 and 2021 in the state. The state will send $ 250 to individuals who have filed returns as single taxpayers, $ 375 to the head of household, and $ 500 to those who have filed jointly.
Hawaii
Democrat Gov. David Ige proposed in January to send $ 100 to each taxpayer and their dependents, which means $ 400 for a family of four.
Idaho
Republican Gov. Brad Little signed a bill in February that includes $ 350 million in tax credits, which will apply to 12% of an individual’s Idaho 2020 income tax return, or 75 dollars for each taxpayer and dependent, whichever is greater.
That means a family of four could receive at least $ 300.
Indiana
According to IndyStar, Indiana residents will receive $ 125 each after filing their taxes in 2022 due to higher-than-expected tax revenues.
Tomorrow
Governor Mills wants to send $ 850 to most residents as part of the state budget bill. In a statement, his office said the average Maine resident will spend $ 560 more this year than last due to inflation.
Minnesota
Democrat Gov. Tim Walz has released a plan to spend the state’s budget surplus that included a proposal for $ 1,000 per couple of income tax rebate checks.
New Jersey
Democrat Gov. Phil Murphy and the Democratic-led Legislature included cash checks of up to $ 500 on nearly a million families as part of a budget deal last year when the governor and lawmakers they ran in the election.
New Mexico
Democratic Gov. Michelle Lujan Grisham earlier this month signed a law to offer $ 250 discount checks for singles and $ 500 for married couples. Like stimulus checks issued by the federal government during the pandemic, these include income limits, with couples earning up to $ 150,000 and singles with incomes of up to $ 75,000 eligible for checks.
New York
Democratic Gov. Kathy Hochul is proposing a tax cut for New Yorkers through a $ 1 billion property tax cut program. The average benefit from the property tax rebate would be about $ 970 for homeowners outside of New York City, according to Bloomberg News.
Virginia
Virginia lawmakers are expected to approve a tax cut in the form of a discount check, although the amount is still unclear, according to local news site Wavy.com. The various proposals would send $ 250 or $ 300 for each individual, and $ 500 or $ 600 to married couples, he said.
—With a report from the Associated Press.
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