California rejects Prop 30 plan to tax the rich to pay for electric vehicles

California voters on Tuesday rejected a ballot measure that would have raised taxes on the state’s richest residents to boost electric car sales, especially for low-income residents.

Measure, Proposal 30, was supposed to help the Golden State meet its aggressive ambitions for clean air and climate change. Transportation is the largest contributor to greenhouse gas emissions in the US. In August, the California Air Resources Board secured a ban on the sale of gasoline and diesel vehicles by 2035. passed a law in September, requiring it to cut its emissions by 40 percent from 1990 levels by 2030 and zero its contribution to climate change by 2045. Legislators also approved almost $54 billion to finance climate change adaptation and mitigation.

“There is simply no realistic way to achieve our climate, air quality and equity goals without zeroing out exhaust pollution,” he said. Max Baumhoefnersenior attorney for the Natural Resources Defense Council, one of the groups supporting Proposition 30.

To help achieve this goal, Proposition 30 was aimed at subsidizing electric vehicles, charging stations, and funding for wildfire protection. The money was to come from a 1.75 percent tax on incomes over $2 million. Lawyers appreciated that it will raise $100 billion over 20 years, with more than half of the money going to low-income and disadvantaged sections of the population. The vote took place on the anniversary of the 2018 camp fire, the deadliest and most destructive wildfire in state history.

Proposition 30 was one of the most overtly redistributive climate policies ever put to a vote, and it was initially popular. Polls in the summer showed two thirds of Californians were for. But business groups, along with California Gov. Gavin Newsom, aggressively opposed Proposition 30, tipping the scales against it. Newsom said in the ad that Proposition 30 “was designed by one corporation to channel state income tax to its company.” This company, car rental company Lyft, spent $45 million to lobby for Proposition 30. However, there was no specific exception to this measure for Lyft, and the vast majority of the bill’s benefits will go to individuals, not companies.

As of Wednesday morning, when 41 percent of ballots were registered, 59 percent of Californians voted against Proposition 30. Associated Press called the measure conquered.

Many of the dynamics here are unique to California. “It can be easy to overvalue this vote one way or the other,” he said. Sean Bowlerprofessor of political science at the University of California, Riverside, in an email.

But much of the rest of the country has a habit of following California, especially when it comes to cars. As other states consider ways to achieve their climate goals, the failure of Proposition 30 could teach some important lessons.

What does the failure of Proposition 30 mean for the rest of the country?

One of the big challenges in the clean energy transition is that the people who suffer the most from issues such as air pollution and the effects of climate change are often the last to see the benefits of green jobs and low-emission technologies. .

This is especially true when it comes to cars. Low-income, minority and disadvantaged communities often have more roads and less green space, and these roads are driven by disproportionately older and more polluting vehicles. That’s why environmentalists embraced the idea just transition help ensure a more equitable distribution of environmental as well as economic benefits as societies adapt to and mitigate climate change.

Vehicle electrification in low-income communities is one way to do this. More electric vehicles and fewer gasoline-powered vehicles will bring immediate health benefits and also reduce the contribution to climate change. It will also benefit companies like Lyft.

“Generally speaking, their drivers are on a lower income and they will need help to buy these cars – so yeah, that’s good, and it’s a way to get someone else to help pay for these new cars/offset the cost,” Bowler said.

But electric vehicles are still expensive compared to gasoline-powered cars and trucks. The average price of a car in the US this year was about $48,000. average cost of an electric car $66,000. Even with subsidies meant for low-income people, electric cars may not be affordable enough for most until manufacturers cut prices even further.

“I think we need to manage expectations,” said Katherine Wolfram, a visiting professor at the Harvard Kennedy School of Energy and Environmental Economics. “Proposition 30 will kill the very, very rich, but I don’t think we can fool ourselves into saying it helps the poor.”

Another problem is that if California raises taxes on wealthy people even more, some of those residents may move to other states. “I think it’s probably better for this to happen at the federal level and not at the state level,” Wolfram said.

The federal government has already taken some important steps to increase the number of electric vehicles, trucks and buses on the roads. The bipartisan Infrastructure Act and the Inflation Reduction Act have provided billions of dollars for electric vehicles and charging stations.

The cynical reading of the failure of Proposition 30 is that politicians, even in the blue states, will do whatever it takes to protect their wealthy donors, even at the expense of their stated climate change goals. Taxes are a particularly tough sale. Voters in Washington state winced twice at the introduction of the carbon tax when it appeared on the ballot.

But the fact that the majority initially supported Proposition 30 shows that there is an appetite for progressive measures to deal with rising average temperatures. “At a high level, every state should pay attention to how those most affected by air pollution are realizing the benefits of reducing air pollution in the near future,” Baumhoefner said.

And governments should target more than just cars. For low-income communities, the most effective solution to local pollution and climate change may not be to switch to cleaner cars, but to move away from cars altogether. Improving public transportation, creating more walkable neighborhoods, and using smaller electric vehicles like bicycles can bring more health and environmental benefits than just electric vehicles.

What is clear, however, is that even for a state like California, which has set zero greenhouse gas emissions as a destination, there is still a messy debate about the best way to get there, and there are a lot of potholes in the road ahead.

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