As Americans struggle to pay bills and provide for their families amid 40-year-high inflation and record high gas prices, states have turned to inflation rebate checks as a way to try and offset the financial strain.
California is sending out inflation relief checks in a deal struck by Gov. Gavin Newsom and the state’s lawmakers. California residents who meet certain criteria will receive a one-time payment of as much as $1,050.
An estimated 23 million Californians are set to receive checks.
Over on the East Coast, Florida Gov. Ron Desantis is also preparing a similar approach, prepping checks to go out to 59,000 households. The payments will be up to $450 per child and be awarded to lower-income families.
Some have expressed concerns about the economic impact that stimulus spending could have on an already-weakened economy.
“First, while there are enormous uncertainties, there is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability,” economist Lawrence H. Summers wrote in a op-ed.
Nobody can suppose that inflation is under control when three-month core inflation exceeds six-month core inflation and six-month core inflation exceeds 12-month core inflation.
May latest thoughts on inflation:
‘A Dangerous Level of Groupthink’ ?utm_source=tw @intelligencer
— Lawrence H. Summers (@LHSummers) July 14, 2022
Though it’s widely known that money printing by the Federal Reserve and deficit spending are the source of inflation, California’s inflation rebates are coming from its $97 billion budget surplus, and Florida’s payments will be funded with an extra $35.5 million in the state’s budget that Desantis says the state will have to return to the federal government if the awards aren’t made.
“The problem that I see with a lot of these, the way they structured them — especially Florida — is that they’re kind of picking winners and losers,” Hannah Cox, a Libertarian-Conservative commentator and co-founder of BASEDPolitics, told Timcast. “And even though all people were impacted by the spending and printing policies, it’s if they’re coming through and they’re picking and choosing which Americans they think deserve and not more than others. And I think that’s always, on its face, problematic.”
“And I think that ultimately these kinds of policies that send people money, they’re meant to keep people from asking questions and getting angry and really looking into the root cause of why our economy is broken right now,” she explained.
Cox believes sending the surplus money back to Americans is a better option than giving it to the federal government. However, she acknowledged that stimulus spending — the first and second rounds, along with the $1.9 trillion in the American Rescue Plan — is what created America’s current inflation crisis.
“When you do this kind of policy, you’re basically putting a bandaid on an issue and a wound that the government created in the first place,” she added. “I don’t like stimulus spending. I think that we need to just cut taxes across the board. That’s a lot better way of putting money back into the pockets of Americans.”
California and Florida are not the only states sending out inflation relief payments.
The full list, according to Fox Business as of the date of publication, includes:
Colorado: Residents who filed their 2021 tax return by June 30 will receive a check for $750 by September. Joint filers will receive up to $1,500.
Delaware: Delaware residents who had filed a 2020 state tax return received a one-time payment of $300 earlier this year. Couples filing jointly received $300 apiece.
Georgia: Georgia residents who filed both their 2020 and 2021 tax returns will be eligible to receive rebate payments based on their tax-filing status.
Hawaii: The Hawaii legislature approved a tax rebate earlier this year that provides $300 to residents who earned less than $100,000 in 2021. Those who earned more than $100,000 will receive a one-time payout of $100.
Idaho: $75 to each taxpayer and dependent, or 12% of their 2020 state income tax liability — whichever is greater.
Illinois: Under the law, individuals who earned less than $200,000 in 2021 will receive a $50 tax rebate. Couples who file jointly and who earned less than $400,000 in 2021 will receive a one-time payment of $100.
Indiana: The state began delivering $125 payments to all residents regardless of income thanks to Indiana’s automatic taxpayer refund law.
Maine: Taxpayers who filed a 2021 state tax return and have an adjusted gross income of less than $100,000 if single, $150,000 if filing as head of household and $200,000 if married and filing jointly, will receive a one-time payment of $850. Couples filing jointly can receive $1,700.
Minnesota: Tiered payout options are available for frontline workers who had direct contact with COVID-19 patients and workers who did not.
New Mexico: $250 if income is less than $75,000 a year, and $500 for married couples filing joint returns.
Pennsylvania: $121.7 million fund to people with disabilities, older homeowners and renters.
South Carolina: Some taxpayers will qualify for a one-time payment of up to $800.
Virginia: Taxpayers who filed a return by July 1 will receive a rebate by Oct. 31 of $250 if single, while couples filing jointly will get up to $500.