Steinberg calls for carbon tax on gasoline

Steinberg calls for carbon tax on gasoline

Last week, state Senate President pro Tem Darrell Steinberg, D-Sacramento, proposed a “carbon tax” on gasoline and other fuels. This tax is separate from the taxes imposed by the state’s cap-and-trade program.

Steinberg has opposed a cap-and-trade emissions tax on gasoline suppliers and consumers similar to what has been enacted — under AB32, the Global Warming Solutions Act of 2006 —  as the state’s cap-and-trade program for other industries. Under that program, the California Air Resources Board has been trading carbon credits for more than a year.

According to KQMD, “Next year for the first time, transportation fuels will come under the program: oil companies will have to account for the emissions from Californians’ cars and trucks. The cost of buying additional pollution permits is one that companies are almost certain to pass along to consumers.”

A cap-and-trade tax limits the amount you can pollute unless you want to buy a permit to pollute over the limit. You then can “trade” your excess permits if you don’t go over the limit.

Instead, Steinberg favors a simpler gasoline tax, which he says would not cost more than what cap and trade would cost consumers. That is, it’s supposed to be a replacement tax. And Steinberg’s gas tax is called a “carbon tax,” which makes it sound more environmentally fashionable and legitimate.

In a statement, the Western States Petroleum Association said:

“Sen. Steinberg deserves credit for his transparent effort to address the the true cost of California’s climate change policies.  By acknowledging that the state’s cap-and-trade regulations for fuels are about to have a significant impact on the cost of fuel for consumers, Sen. Steinberg has proposed a transparent carbon tax as an alternative.”

The statement acknowledges that the current system under AB32 is a tax, even though it wasn’t sold that way to the state’s citizens when the bill was passed by the Legislature in 2006, and signed into law by then-Gov. Arnold Schwarzenegger.

The problem is that it remains speculative how much cap and trade on vehicle fuels will cost consumers. There is also a possibility we might end up with both taxes.

Double taxation

Assuming Steinberg’s “carbon tax” goes into effect, it would be on top of the already hefty California tax of 71.9 cents a gallon, the highest in the nation. Just last summer, the gas tax was boosted by 3.5 cents. But even taxes on supposedly greedy oil companies would just be passed through to consumers as an estimated 12 cents per gallon excise tax. An excise tax is a tax on top of a tax.

Using a figure of 15.9 billion gallons of gasoline consumed in California in 2011, the added 12 cents per gallon would equate to about $1.9 billion in added gas taxes. So the new tax would bring gasoline taxes up to 83.9 cents per gallon. A 10-gallon fill-up at a service station would then cost $8.39 in taxes. 

Where would carbon tax on gasoline be spent?  

By calling the gasoline tax a “carbon tax,” the taxes collected wouldn’t be spent on pouring concrete for highways. Rather, they would be spent on programs to reduce “greenhouse gases.” Steinberg said he wants to spend the new gas taxes to “improve public transportation and provide an income tax rebate to families earning less than $75,000.” Steinberg has not spelled out whether “public transportation improvement” means the High-Speed Rail, but that could happen.

And would Brown support spending a carbon tax to fund High-Speed Rail, a project he keeps promoting?

That’s where the election comes in. In 2010, Brown won the governorship in part on a campaign promise not to enact any new taxes without voter approval. Hence, his $7 billion tax increase in 2012 became law only after voters passed Proposition 30.

Which is why it could be Brown who steps on the brakes for any new taxes this year, including Steinberg’s gas tax proposal. Californians have been cringing at the pump again as gas prices, due to refinery outages, have been soaring back toward $4 a gallon — without Steinberg’s tax increase.

10 comments

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  1. Ronald Stein
    Ronald Stein 24 February, 2014, 10:29

    Government actions resulting in over regulations on businesses, over taxation and uncontrollable fees are contributing to the middle class becoming an endangered species as the inequality has deepened. The results are that consumers are paying for over regulations to businesses.

    Extra costs resulting from government actions on businesses are a slight inconvenience to those making the big bucks such as those making the big bucks. Those behind the over regulations, over taxation, and uncontrollable “fees” on businesses are mostly the highly compensated, and most with sweet defined retirement benefit packages waiting for them upon retirement, i.e., those that CAN afford the higher costs that trickle down to all citizens for products and services.

    Those that earn less than $20 per hour, which includes virtually all those in the food and hospitality industries, are the ones that can least afford higher costs for power, transportation fuels, and food. There is minimal impact to those that can afford the results of our relentless business unfriendly efforts, but little hope for those that barely exist at today’s cost of living.

    How will the political environment explain to the middle and poor classes why over regulations and more costs being imposed on businesses is helping to improve the inequality of the middle class that has been growing rather than shrinking?

    Reply this comment
  2. Ulysses Uhaul
    Ulysses Uhaul 24 February, 2014, 11:01

    More for the Ragwus feeders

    Think the Ragwus came from the history show “Vikings”.

    Reply this comment
  3. billyBS
    billyBS 24 February, 2014, 13:17

    How will the political environment explain to the middle and poor classes why over regulations and more costs being imposed on businesses is helping to improve the inequality of the middle class that has been growing rather than shrinking? – See more at: http://calwatchdog.com/2014/02/24/steinberg-calls-for-carbon-tax-on-gasoline/#sthash.iZo2Wk01.dpuf

    Answer: Climate Change.

    Reply this comment
  4. Rex the Wonder Dog!
    Rex the Wonder Dog! 24 February, 2014, 13:18

    More taxes!! Yes, just what the doctor ordered! That way we can comp our selfless public servants $300K instead of $200K, and allow them to retire at age 35 instead of 50 🙂

    They are hero and deserve 🙂

    Reply this comment
  5. Queeg
    Queeg 24 February, 2014, 20:18

    The globalist caused all this somehow…..too tired tonight to sift it all out for you Poodle……so tuck yourself in tonight. Ok?

    Reply this comment
  6. bill
    bill 24 February, 2014, 21:09

    Let’s tax all the gas coming out of Steiny’s hiney.

    Reply this comment
  7. chuck
    chuck 25 February, 2014, 14:53

    typical effing CA democrat slopping up his freebees at the public tax trough.
    The sooner the liberal democrats in CA learn that it is the liberal democrat politicians that are responsible for chocking the economic life out of the state, the sooner, if ever, the state of CA could once again regain the status of 5th largest economy in the world. With folks like Steinberginstain and JB running the show in Sac, the further in to the abyss CA will sink until it has no life remaining. At that point, just sign it over to Mexico because that certainly seems to be the end game of the liberal democrat politicians.

    Reply this comment
  8. Ulysses Uhaul
    Ulysses Uhaul 25 February, 2014, 20:58

    Your fate is sealed Chuckie. Pay your taxes. Enjoy the sunshine. Be happy. Such a rant is alarming. Watch ya meds!

    Reply this comment
    • chuck
      chuck 26 February, 2014, 12:18

      Hey there Ulysses, Not to be contentious but my fate, as you put it, is not my surrender to idiotic utopian rulers but it’s obvious that it is yours. My fate is in my eventual exodus from CA, just like thousands of others who have left this state over the past 15+ years. It is beyond astounding that democrats in the capitol demonstrably believe CA can survive by taxing itself in to prosperity while selectively disseminating tax dollars based purely on demographics to garner votes. Corruption rules. It is reasonable to conclude those in Sacramento will never apply economic logic as long as there are folks left in the state for them to exploit using their utopian socialist schemes. Unless one is in the halls of the State Capitol, one is a victim of the same. Which are you?

      Reply this comment
  9. Ulysses Uhaul
    Ulysses Uhaul 26 February, 2014, 19:57

    Chuckie

    Remembrr us…..we treat your move like our grandparents moving back to Nebraska.

    Reply this comment

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