Carbon Tax Initiative

Two weeks ago the Times had an interesting article ($) about a grassroots attempt to introduce a carbon tax in Washington State, Initiative 732:

They're wrangling signatures for Initiative 732, which would put a new tax on carbon burned in gasoline, natural gas and other fossil fuels - while cutting other taxes by an equal amount. By raising the price of dirty energy, I-732 aims to cut greenhouse-gas emissions and encourage development of cleaner alternatives.

Jim Whitehead called for people to sign the petition on Page 2, citing its relevance to transit advocacy and he's right. I'd like to expand on why. But first, our climate-activist state leadership is on board with this, right?

Nope. Instead, a powerful coalition that includes the state's major green and labor groups is trying to squash the effort"

As a "revenue-neutral" plan, I-732 would not fill state government coffers with cash. While the carbon tax would raise an estimated $1.7 billion a year - and cost the average family an estimated $300 a year in higher gas and energy prices - it would give away an equivalent amount back to consumers, mostly through a full percentage point cut in the state sales tax.

That differs from cap-and-trade legislation offered up by Inslee and backed by the alliance in this year's legislative session. That plan would have raised more than $1"billion a year from fees on carbon and directed the proceeds to the state education budget, transportation projects, affordable housing and other programs.

The establishment version seems like a classic example of chaining a popular cause (doing something about the climate) to an unpopular one (increasing the size of generic "government"). I can't help but think of I-1098, the 2010 Income Tax initiative, which chained a very popular progressive tax system to the most beloved of all local government spending, education.

Obviously, there is some segment of the population that prefers a regressive tax system, but not nearly enough to defeat an income tax. But by not making the measure revenue-neutral, I-1098 made the following additional enemies:

• Victims of the regressive tax structure who want their taxes to be lower;*
• People who don't believe in supporting public education;
• People who want education funded, but only by cuts in programs they personally don't like (or by cutting "waste");
• People who would like to improve education outcomes but think that further spending by the existing school infrastructure will be wasted.

The point is not that any of these factions are correct, and indeed any argument over them is off-topic in the comments. The point is that I-1098 forfeited the opportunity to win a simple argument that poor people pay too many taxes, and instead took on a much more entrenched debate about the size of government. Everyone hurt by Washington's regressive tax system suffered for this decision.

Climate change is too much of emergency to play games like this. Voters should approve I-732, and advocates for additional government spending (like us!) should win that debate on its own terms.

You can visit I-732's website here.

* As poorer voters wouldn't see lower taxes as a result of the measure, they were especially susceptible to the argument that a new income tax would eventually grow to ensnare them.