The 1970s were a long time ago. It might be hard to imagine, or remember, what it was like back then. So, I’ll paint you a picture: Inflation was skyrocketing, costs were soaring, Iran was in turmoil and the United States was in proxy war with Russia over the latter’s invasion of a neighboring nation.
The governor’s proposal would impose a “maximum gross gasoline refining margin” of a yet-to-be-determined number of cents per gallon. If a refiner exceeds the margin, the California Energy Commission can impose a civil penalty that will be deposited into the “Price Gouging Penalty Fund” that will supposedly refund the money back to consumers.
There is also a question of whether this “civil penalty” is, in fact, a tax. When Newsom first introduced the idea in October, he referred to his proposal several times as a “windfall tax.” But somewhere between then and when he unveiled his proposal last week, his tax had become a “penalty.” The reason for this is clear: thanks to Proposition 13, any tax increase must be approved by two-thirds of the Legislature.