Stimulus Checks Up To $1,050 To Benefit 23 Million Californians

Stimulus Check
Stimulus Check

The pause in federal stimulus checks with the end of 2021 has prompted many states to provide inflation-linked relief to tide over the rapid rise in all-round prices starting from gasoline to groceries. Around 21 states have already provided stimulus checks or have initiated legislative measures to send various forms of monetary support to residents this year.

The inflation relief support includes stimulus check that has been either directly credited to accounts or sent through the US Postal Service in the form of paper checks and debit cards. Many states have also given income tax rebates, waived state sales tax on various items including gasoline and diesel, and have provided gas and transit cards.

California was one of the first states to come up with a stimulus check for residents. The Golden State I and II provided much-needed support to residents even as federal stimulus checks were drying up.

Governor Gavin Newsom initially mulled giving a gas card of up to $400 for every vehicle registered in the state, with each family eligible for a maximum of two cards. Transit cards were proposed for families that did not own cars.

But prompted by state Democratic legislators, he dipped into the vast budget surplus that California has to send gas rebate relief payments that will go up to $1,050 and benefit around 23 million residents of California, around 60% of the total population.

Even immigrants will benefit from this largesse. The Middle-Class Tax Refund is the largest such program of its kind in the Golden State’s history, according to a press release from the Governor’s office. The stimulus check has been initiated to help residents cover the rising cost of groceries and gasoline.

Gov. Newsom said that an increase in prices fueled by the pandemic, the economic downturn, and the disruption in the worldwide supply chain, has prompted many to make impossible choices and cut corners to make ends meet. The return to normalcy has increased the pain caused by the increase in gasoline prices, which touched $6.38 a gallon in the last week of September.

The governor’s office had revealed that the payments will range from $400 to $1,050 for married couples who file jointly if their income was within the eligible limits. For individuals, the gas rebate amount is between $200 and $700 with the amount linked to their income. The amount is also reliant on the filers declaring any dependent.

State officials revealed that around 8 million payments will be credited directly to bank accounts between October 7 and November 14. Another 10 million will go out through the US Postal Service in the form of debit cards between October 25 and January 15.

The total bill for the cash-back stimulus check will be around $9.5 billion. Residents can visit the official site, to get details of their eligibility and the estimate of their total refund.

Detail of The California Cash Back Stimulus Check

The California cashback has been going out fast and will be hitting the bank account soon. 23 million Californians will get up to $1,050 and the payments are linked to residential status, income, and filing status.

The payments are going out in three layers. Individual filers with an adjusted gross income (AGI) of $75,000 or less will get a $350 stimulus check plus the same amount if they declare any dependent. For joint filers with earnings up to $150,000, the total comes to $700 plus another $350 if they declare any dependent. This is the maximum payable as the total could rise to $1,050 for families in this category.

The second layer allows $250 for individuals with earnings between $75,001 and $125,000, and $500 for married couples filing jointly. Individual or joint filers are eligible for another $250 if they declare any dependent. The maximum under this layer is $750.

The topmost layer is for individual earnings between $125,001 and $250,000, which will fetch the filer a $200 stimulus check plus another 200 for any dependent. For joint filers, the total can go up to $600 if they declare any dependent.

The administration has revealed that 18 million payments will be distributed in all with 8 million direct bank deposits between October 7 and November 14. The estimated 10 million cards will go out between October 25 and January 15 next year.

Concern Persists About Further Rise In Inflation

The California stimulus check and other relief measures given by the state that is linked to the pandemic are expected to pump in close to $20 billion more into the economy.

While for families and individuals struggling with bills and rising prices, getting some extra money from the government will offer some immediate relief. But some economists and the Republican opposition have argued that putting more money into the economy can drive up demand once again and push up prices for everyone. This would make it a zero-sum game for all concerned.

Beth Akers of the American Enterprise Institute said that giving out money in an inflationary environment will only worsen matters as it will push up prices immediately. This will negate the good that is achieved by sending money directly to beneficiaries.

Federal Reserve figures revealed that prices have continued to rise and were up 6.2% in August as compared to 2021 figures. The bank has been tasked with keeping inflation within manageable levels, which it proposes to do by raising interest rates. But higher interest rates will give rise to other economic pain for citizens and make it expensive for them to borrow money.

The Federal Reserve has already raised its benchmark rate by three-quarters of a percentage point earlier this month, for the 3rd time in a row. Even the former economic adviser of former president Barack Obama, Jason Furman of Harvard University has argued that the California cash back could affect prices across the country, given the sheer amount of money that is being pumped directly into the economy.

Furman said on social media that the California inflation relief payments could end up spreading inflation to the rest of America, with California also affected to some extent.

But state governments continue to eagerly send out payments and consider it as a helpful benefit to taxpayers with the midterm election a month away.

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