Washington Activists Seek Carbon Tax

CarbonWA-tax-swap

Carbon Washington (CarbonWA) is a citizens’ coalition seeking to enact a statewide carbon tax through a citizens’ initiative.* I-732 would incrementally institute a tax of on all fossil fuels consumed in Washington State. The revenue raised would be used to cut the state sales tax by 1%, to eliminate the Business and Occupations (B&O) tax on manufacturing and to fund the Working Families Rebate (a program the state legislature created in 2008 but never funded).

British Columbia’s Carbon Tax

I-732 is modeled after a carbon tax British Columbia (BC) introduced in 2008, which has received lavish praise from the (pro-corporate) Economist. Prior to its enactment, business warned the carbon tax would increase costs and slow the economy, while the left-leaning New Democratic Party (NDP) warned it would hurt the poor. Both were wrong.

Because the funds raised by BC’s carbon tax are used to cut income taxes (for individuals and businesses), it has been as beneficial for the British Columbia economy as for the environment. In a way, this makes a lot of sense. Taxing people for working and adding wealth to the economy is one of the biggest drags on economic growth there is. It makes a lot more sense to tax activities you want to discourage, such as polluting the atmosphere.

BC also implemented their carbon tax incrementally. The new tax was initially set at C$10 ($10) per tonne of carbon-dioxide emissions, rising by increments of C$5 per year to C$30 in 2012. At present this translate into a 7 cent per litre tax (approximately 25 cents per gallon) on gasoline.

As predicted, the carbon tax has proved as beneficial  for the economy as the environment. Since 2008, per capita fuel consumption in British Columbia has dropped by 16%, which contrasts with an increase of 3% in the rest of Canada. The province now has the lowest income tax rate in Canada and one of the lowest corporate tax rates in North America. Meanwhile per capita GDP continues to outperform other provinces. BC also enjoys lower jobless rates. Thus it’s no wonder it remains extremely popular, supported by 64% of BC residents.

How I-732 Will Work

Under I-732, the state will collect a tax on all fossil fuels sold or used within Washington State. This will include fossil fuels sold or used for air travel, motor vehicles boats, and electrical generation. (19% of Washington’s electricity is renewable, generated by hydropower). The tax rate will start at 15 dollars per metric ton of carbon dioxide as of July 1, 2017, increasing to 25 dollars per metric ton as of July 1, 2018, with automatic increases thereafter by 3 ½ percent plus inflation.

This tax swap will take place over two years. B&O tax on manufacturers will be eliminated in full the first year. The state sales tax will be reduced by ½ percentage point per year over two years. The Working Families Rebate will phase in from 15% of the federal EITC (Earned Income Tax Credit) in the first year to 25% of the federal EITC in the second year and beyond.

Halving US Carbon Emissions

Carbon Washington executive committee member Yoram Bauman hopes Washington will serve as a model for other states. According to Bauman, CO2 emissions could be halved if all fifty states adopted similar a similar carbon tax.

More information at www.carbonwa.org


*I-732 is an initiative to legislature. If Carbon Washington collects enough signatures to qualify, the 2016 legislature has a choice of enacting it into law, enacting substitute legislation or placing it on the 2016 ballot.

20 thoughts on “Washington Activists Seek Carbon Tax

  1. LET THESE WASHINGTON ACTIVISTS PAY THE CARBON TAX ALL THEY WANT, AND LET THE REST OF US THE HELL ALONE. I HOPE THEY ARE HAPPY, WHEN THEY GET TAXED BURNING TOAST, NOW THAT IS JUST MORE CARBON.

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  2. Just one question (and not that I have a problem with reducing the consumption of non-renewable sources of energy): given that oil is produced for profit, what happens to the overall price of oil when the tax regime finally does manage to reduce demand? The price drops (which in theory would make oil more affordalbe for lower income and carbon tax exempt regions and groups around the world, not necessarily a bad thing — since this means a more equitable redistribution of a scarce but highly useful resource — unless, of course, carbon emissions really are a serious environmental hazzard (which I happen to doubt)).

    The scheme can only work in the long run if tax increases rise faster than the market price drops, at least in those regions where the tax is levied.

    For an accross the board reduction in CO2 emissions, the tax regime would need to be insituted in all regions where non-renewables were being consumed, i.e., it would have to be global or transnational.

    On the other hand, the citizens of the regions wherein the tax is being imposed (assuming the funds are used to enhance public services or to redistribute income more equitably) end up ahead regardless of what other regions are doing in terms of taxing carbon: a higher local consumption tax means a squeeze on corporate profits being extracted from the region at hand and thereby more funds from consumption being retained for local public expenditures.

    Perhaps I’m missing something?

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    • Theoretically you are probably correct, but I don’t think anyone is arguing using a carbon tax in isolation to reduce fossil fuel consumption. Ideally it would be combined with persuading the government to shift their subsidies from fossil fuels to renewable technologies, energy efficiency measures and public transportation initiatives.

      The New Zealand Green Party supports carbon taxes (and resource extraction and financial transaction taxes on banks) as part of a new fairer way of thinking about taxes. If you support economic growth (which I’m quite skeptical about), it really makes no sense to tax income and productivity – in addition to the fact that income and sales taxes are really regressive in that they punish poor people and reward the rich.

      The British Columbia tax swap seems to have worked really well in this regard. It has not only reduced fossil fuel use, but increased GDP growth compared to the rest of Canada. Which seems to be the main reason the Economist has such glowing praise for it.

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  3. Remember The Ancient Teachings,
    Wolves Do Not Care What Sheep Think.
    Appearances are deceptive.
    The tyrant will always find an excuse…

    Aesop Fables:
    Scorpion broke his promise and stung the frog.
    The wolf justifying his right to eat the lamb.

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  4. No and HELL NO!

    Social justice my ass! We will never improve the standard of living for anyone except the folks who are already extraordinarily wealthy by allowing the government (the most corrupt entity on the planet composed of the most corrupt people on the planet) to redistribute money and resources or by increasing or imposing new taxes that only seem to ALWAYS harm the middle class to the point of creating increased poverty for more people. The rich get richer and the class of of poor people grows larger.

    If you truly desire social justice then become activists against government corruption and waste. Stop looking for ways to redistribute the wealth (stealing from the hard working people who are barely keeping their heads above water as it is).

    Maybe become activists in educating people who are too young, too irresponsible, too selfish, too poor to STOP having multiple children and then expecting the rest of society to pick up the tab to feed, cloth, educate, house, and provide healthcare for someone else’s children.

    If we can’t force some people to provide for themselves and their own offspring, why is it okay to force the rest of the people to sacrifice their own needs, wants, goals, etc. for someone else?

    Wealth redistribution should be voluntary only. Why should I trust the government to spend my money better than I can. It’s folks “useful idiots” always complaining about social justice who give freedom and control to a bigger, more centralized government at the expense of everyone else.

    Redistribute your own wealth, leave mine (my paycheck) the hell alone. I’ve got children to raise. My children, not someone else’s children.

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    • I disagree. I think tax systems should be reformed when they disproportionately punish working people and small businesses. I know because I used to own a small business in Washington. Unlike nearly all other states, there’s no income tax in Washington, which means the burden to fund state government falls mainly on working people and small businesses (through a heavy sales tax and a business and occupation tax).

      Politically it would be extremely difficult to introduce an income tax (and begin taxing corporations) in Washington State because it would require a change in the state constitution. Polls show a carbon tax would be politically easier to implement.

      CarbonWA has a good tax swap table on their webpage showing the effect on small businesses, as well as residents of varying income levels. I’m strongly supportive of small businesses because all the data shows they are the backbone of our economy. Too many have gone bankrupt recently, in part because of the heavy tax burden they carry. I think it’s important to reform taxes that are unfair.

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    • “The rich get richer and the class of of poor people grows larger.”

      And that is the nub of the problem, isn’t it? And how do the rich get richer? There is this thing called “profit.”

      One way of looking at “profit” — because that’s in fact what it is — is to regard it as a “tax,” but one that is levied by and paid to private bureaucracies rather than “public” ones. Of course, under the current “regime” in the U.S. — since this is the regime at issue — so called “public” institutions (your government institutions or bureaucracies) are heavily skewed toward gearing the “goods and services” they provide to the interests of the rich, i.e., corporate interests, over those of ordinary people.

      So Americans essentially pay one kind of tax to public institutions that is then used to augement the second kind of tax (profit) paid to private institutions. The economic exploitation of Americans by the super-wealthy of America is therefore currently twofold, with the purposes of public expenditures tightly aligned with the pecuniary interests of the already obscenely rich.

      If taxation law is re-written in such a way that the moneys appropriated must go to specifically designated public purposes that benefit ordinary Americans, if corrupt government officials do not have any discretion over how these moneys are to be spent because the transfers are codified and, so to speak, automated by law, then the funds end up where the ‘public’ originally intended that they should.

      Furthermore, the logic operating behind this proposed ‘carbon tax’ skeem is akin to how a “Land Value Tax” would work, which limits rent and capital gains extraction on land values by the rich, retaining the lion’s share of what are really community created and realized “land values” for more broadly shared community purposes: the banks and rentiers end up poorer, but ordinary people and their communities end up with more, assuming that the ‘moneys’ appropriated by ‘public’ institutions go to genuinely mandated ‘public’ ends.

      A “carbon tax” used to reduce ‘taxes’ paid by individuals and small business is in effect a ‘redistribution’ of the corporate profits of the oil cartels back to the community. The rich, in this case, get less of what they are already accustomed of getting by way of margins on oil, and ordinary folk get to keep more of what they earn. At least that is the ‘form’ or ‘structure’ of the circumsribed logic at hand.

      (Unfortunately, given that the capitalist regime makes for wage flexibility, it is certain that in time other ‘capitalist’ factions would begin to ‘appropriate’ the community surplus originally re-appropriated from the oil cartels through the proposed CO2 tax: the fact that ordinary people would initially end up with more money in their pockets would not go unnoticed by the ‘local’ vultures; ‘rationales’ would quickly be developed as to why local wages could be reduced, given the increased discretionary incomes of the wage slaves and small entrepreneurs, an increase that, from the viewpoint of the wealthy, the wage slaves or small businesses neither deserve or need. Such is the nature of capitalism.)

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  5. Here’s an idea. Tell 0bama and friends to sacrifice their multiple luxery vacations or their own children’s outrageously expensive elite educations. How about insisting Sharpton and other frauds/tax cheats to pay their millions in back taxes? Maybe the Clinton’s could redistribute the public speaking fee wealth they’ve accumulated over the last 2 decades.

    When are these folks going to give up a piece of their pie? When government officials, corporate executives, and banking CEO’s have the same standard of living as everyone else, only then can we talk about redistributing wealth. Until then, (which is NEVER going to happen) , stop trying to decide how other people’s income, MY INCOME, should be spent!!!!!!!!

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  6. I understand that, but leaving it in the hands of the government to to decide what’s right for everyone else, then EXECUTE the decision on it’s/their insider terms, and then be the entity in charge of the money produced by the new tax to redistribute as it/they see fit (take the majority to benefit themselves/those in authority in the government and their friends) is insane and obscene.

    Not only does the tax system need to be reformed, the entire system needs to be reformed (not through Socialist revolution and deceptive tactics), but by removing the entire lot controlling the system and demanding a reformed system of legitimate checks and balances, full transparency and accountability, the removal of lifetime politicians and revolving door/extreme conflict of interest positions within government/agency/corporation networks, and mandatory investigation and trial of all government officials suspected of various crimes by a jury of “we the people” – not insider judges and lawyers who use the system to corrupt the system.

    The carbon tax in Washington will be a trial run for the entire country and once successful in Washington wil then be mandatory nationwide. Once this occurs, the corruption will begin.

    The tax itself isn’t the problem. The problem lies in how it will be used to pacify activists in the short term while becoming the latest scheme to separate middle class and poor people from their money.

    The government will not bite the hands that feed them and keep them in power and control. The government does the bidding of big banks and corporate executives, not what is going to benefit the overall population.

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    • I think if you look closely at the text of the referendum, it’s extremely specific on how the new tax is to be distributed. It leaves nothing to the discretion of the government. That’s why I see the referendum (and the referendum process in general) as an important step it taking back power from the government.

      The way the referendum process works in Washington, the state legislature is cut out of the loop. The text of the referendum becomes state law and the legislature can’t change it for 2 years.

      I say let the voters decide on this issue.

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