Don Turner: Carbon Tax

Vermont and France have at least two attributes in common—both produce world class cheese and both have a low carbon footprint. France has implemented modern nuclear power to generate electricity which does not generate carbon, and Vermont is a
carbon “sink”—meaning our carbon emissions from fuel are more than offset by carbon absorbed by our forests and farmlands.
 
So it was perhaps unsurprising that French citizens protested a carbon tax proposal by President Macron given the cost of fuel and France’s low carbon profile. French citizens realized that they would pay dearly in additional fuel taxes for the sole purpose of assuaging the carbon guilt of jet-setting EU aristocrats.
 
Let me be clear: Climate change is real, and must be addressed. From modernizing weatherization, to encouraging “green” businesses, to developing well-sited renewable energy, we can tackle this challenge. But a carbon tax will undoubtedly be introduced this upcoming session by the new and more left-leaning legislature in conjunction with more regulation on emissions and tax credits for purchases of electric cars. These proposals or policies are regressive—meaning the impact will be more punitive for low and moderate income people than for upper income folks. Let’s break it down...
The carbon tax:
Low and moderate income Vermonters simply cannot afford an additional 40 to 80 cents per gallon of gas or home heating fuel. Vermonters who live in rural areas drive more distances to get to work or shop than those in larger communities, making it harder for
our small towns to thrive. Construction businesses, farms, and municipal governments will also struggle with additional costs for diesel fuel. Ultimately, these costs will be passed on the consumers--YOU!
 
Proponents of the carbon tax say year-end refunds will offset the additional costs, but some are skeptical as to whether or not these will not make up for the cost increase for most Vermonters. Many low income people do not file taxes and would potentially lose the refund. Furthermore, while tax refunds are provided once a year, Vermonters would bear the increased weekly costs of higher fuel or gas through a carbon tax. This would be unsustainable for Vermonters who are living paycheck-to-paycheck.
 
LIHEAP—a federal and state program that provides fuel assistance for the poor will not go as far with increased costs of fuel. Vermont gas stations and fuel dealers near the border with our neighbors will be uncompetitive on price.
 
Additionally, low-income individuals tend to spend a greater percentage of their income on consumption. That’s an economic reality. That’s why this tax is not progressive, but regressive--it hurts the poorest Vermonters the most.
 
Just what is the end game of the politicians proposing this scheme? Fuel is an inelastic good. It takes a massive change in price to exact even a minor change in the quantity demanded. Struggling Vermonters will be unable to afford transitioning to an electric vehicle anytime soon, so this won’t be deterring their consumption of fuel--it’ll just be making it more expensive.
 
If you understand that, then you understand that this is not about preserving our environment, but instead just another revenue grab by Montpelier.
 
More regulation on emissions:
Regulations will be a hidden tax, like all regulations are, that will force low and moderate income people to make expensive and often unnecessary repairs to their cars. This has already begun with the increased inspection standards.
 
Tax credits and charging stations for electric cars:
Credits targeted to help middle-class Vermonters afford low-emissions or electric vehicles can work, if they bridge the gap needed to purchase these vehicles. However, in most cases these credits benefit wealthy people who are in a position to purchase an electric (not hybrid) cars and enjoy the tax credits. State funded electric charging stations will be very expensive to build and will benefit very few drivers. Interestingly, the vast majority of lawmakers and lobbyists who will support these ideas don’t own electric cars themselves!
 
Polling of Vermont voters consistently reveal that economic issues and affordability are top concerns. It is mystifying that the same people who will be harmed by these policies continue to elect those who do not have their best interests in mind. The Vermont Legislature may be assuming Vermont citizens will not respond to the “Essex Plan”—aka carbon tax—with a yellow-vested protest like the French. But it also appears Mr.Macron, who handily won the French presidency, assumed the same of his electorate.
-Don Turner Jr.
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