With inflation at a 40-year high, American consumers are struggling, paying more on everyday necessities like gas, electricity, and groceries. Now, governors across the country are working to help people, even if the fix is only temporary.
“Lawmakers are very aware that inflation is eroding people’s ability to pay. It’s making a big difference for people and a lot of lawmakers see tax policy as a way to address this problem,” said Jared Walczak, vice president of state projects for the Tax Foundation.
Some governors are proposing tax rebates of up to $500, while others are looking to eliminate the sales tax on groceries or put a freeze on state gas taxes. Walczak tells CBN News it’s a bipartisan effort.
“Republican lawmakers have been far more likely to focus on income tax cuts. They talked about the competitive advantage of businesses being able to invest at a lower cost of driving people into the state rather than out of the state. Democratic lawmakers have been more likely to focus on sales tax rate reductions in providing relief during consumption,” Walczak said.
Congress is also working to pass legislation they hope will provide some more lasting relief.
“You know, when I go fill up my gas tank, it’s almost five bucks, and the price of groceries has gone up. So this is why we need to put more money in the pockets of the working class,” Rep. Ro Khanna (D-CA) told CBN News.
Rep. Khanna says the Biden administration has a plan, and now it’s time for Congress to act.
“I mean, the prescription drug bill would be a big deal, to have Medicare negotiate breaking down the cost of prescription drugs. We all know the experience of having to pay too much out of pocket for drugs. The second thing is, again, the Earned Income Tax Credit expansion, or getting more money in the pockets of working families. And then the third thing is looking at some gas tax holiday,” Rep. Khanna said.
Republicans argue that Democrat spending plans and policies are part of the reason for soaring prices.
“They were warned that spending trillions would lead to soaring inflation. They were told their anti-energy policies would send gas prices to new heights. But they plowed ahead anyway, raising the price at the pump by 50% and pushing inflation to a 40-year high,” Gov. Kim Reynolds of Iowa said during the Republican response to the president’s State of the Union address.
Federal Reserve Chairman Jerome Powell says the war in Ukraine could mean even higher inflation. However, the Central Bank is still planning to move forward with a series of interest rate increases over the next year.
***Please sign up for CBN Newsletters and download the CBN News app to ensure you keep receiving the latest news from a distinctly Christian perspective.***