What happened to making Washington’s taxes more progressive? Now elected officials are rushing to pass a regressive carbon tax, modeled on a British Columbia tax that’s failing to reduce emissions.
If Washington wants to reduce pollution and fare better on its climate-change goals, it should reject Gov. Jay Inslee’s proposed carbon tax.
Instead, the state should put its efforts into environmental regulations that directly and measurably reduce harmful emissions.
As proposed, the carbon tax is a grab bag of handouts for the powerful and politically connected, funded by a steep new tax largely on the middle class. Many of the handouts have dubious benefits in reducing emissions.
Carbon taxes also don’t work as promised. North America’s first such tax, in neighboring British Columbia, is failing to reduce emissions.
Emissions from driving are rising faster than population growth in B.C., despite a carbon tax higher than Inslee’s proposal.
Recent data says emissions increased 2.3 percent from 2013 to 2015. That includes a 7.2 percent increase in transportation emissions, the main focus of the B.C. and Washington plans.
B.C. won’t meet its 2020 carbon-reduction goals. Tax advocates there insist it works, but they’re seeking an overhaul and rate increase in hopes of meeting future climate goals.
Environmental group Food and Water Watch examined effects on the 70 percent of fuels subject to the tax. It concluded B.C.’s tax is a “failed experiment” and proponents “have significantly overstated the purported beneficial effects.”
“Greenhouse gas emissions have been rising rapidly in recent years even as the tax rate and total tax revenues have increased,” it said. “Moreover, the short-term declines in taxed greenhouse gas emissions were more modest and were reversed more quickly than the changes to the untaxed greenhouse gas emissions — exactly the opposite of what would happen if carbon taxes had a causal impact on changing emissions.”
A cynical take is that Washington’s carbon tax is like Trump’s border wall. When first proposed, both were going to be free. Now they’ll cost taxpayers billions. Most don’t want either (voters said no to a “revenue neutral” carbon tax in 2016) and the benefits are debatable, but they’re being rammed through anyway.
State senators who introduced Inslee’s carbon tax in the Legislature (SB 6203) are taking a new tack away from the original message that it would reduce emissions by changing behavior.
Democratic Sens. Reuven Carlyle of Seattle and Guy Palumbo of Maltby say the tax is still good policy because it would raise money for projects they see as beneficial.
Their candor and dedication to reducing pollution are admirable, as is Inslee’s persistence. I’m looking forward to a revised proposal they’ll introduce soon.
But I’m not sold on the tax for several reasons.
First, many of the projects it would fund have questionable effects on emissions. Inslee’s proposal reads like a Christmas list, with goodies for developers, labor, transit advocates and even Microsoft (the high-speed train it wants is a potential beneficiary).
The plan exempts farms, airlines, shippers and certain factories from the tax.
Investor-owned power companies would get carbon taxes back to cover system upgrades. Inslee’s plan would also repay loans they’ve taken for capital projects. If I pollute, will he clear my remodeling debt?
Labor would help dole out billions to those affected by the evolving mix of energy sources, which could be anyone and everyone, since the mix is evolving no matter what. Recipients wouldn’t have to show emission reductions.
This all builds political support but also feeds skepticism about the sincerity of climate-change remedies.
Second, clearly beneficial projects on the list, such as power-system upgrades, will or should happen already because of existing regulations and market demand for cleaner power. Polluters should do this work without subsidies from working-class families. Instead of buying them off, regulate them.
Third, the plan would fund clean-energy ventures, but these ventures don’t need money from carpenters in Tacoma driving pickups or farmworkers heating homes in Mattawa. More than $1 trillion for such ventures was raised the last three years, including nearly $200 billion in the U.S., according to Bloomberg. Bill Gates started a $1 billion clean-energy fund.
Fortunes will be made in clean energy, and investors are lining up. Don’t tap households for more.
Besides, public investments in such ventures have a terrible record, including Washington’s 2006 foray into biofuels.
Even if the carbon tax worked, it’s terribly regressive.
Past federal research has found that increasing fuel costs doesn’t necessarily lead to a corresponding drop in consumption. Households just pay more and have less money for food, clothing and other needs.
Token rebates for the poor won’t make it progressive. The burden still falls harder on the lower middle class.
This exacerbates the proposal’s elitism. It’s pushed by Seattle residents with options to avoid the tax, since the area has density, extensive transit and hydroelectricity.
Lacking such options, the other 90 percent of Washington will be forced to pay more and more, because the tax increases at least 3.5 percent per year.
Over four years, the tax would generate $3.3 billion. Averaged across the state’s 2.7 million households, that’s about $1,200. Good thing the minimum wage increased.
If politicians want to collect billions to fund green and quasi-green projects, let’s discuss that and whether it should happen with regressive taxes.
Climate change is real and needs a strong response, not pricey, feel-good measures that don’t work as promised.