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published on February 8, 2019 - 10:54 AM
Written by Gordon Webster, Jr.

Coming soon to a store near you – a carbon sales tax?

The Democratic supermajority up in Sacramento is back at it, finding creative ways to hike taxes on businesses and working families.

SB 43 from Sen. Ben Allen (D-Santa Monica) is billed as a proposal for a “carbon tax,” which confused Sarah Boot, a policy advocate for the California Chamber of Commerce. Writing in the CalChamber Alert publication, Boot initially thought it would be a tax on fossil fuel emissions.

That’s not the case.

SB 43, which fortunately is a study bill, would replace the state’s sales-and-use tax with a carbon tax that would be based on the “carbon intensity” of the product. Carbon intensity supposedly would measure the amount of carbon emitted during the manufacture and distribution of the product.

As the CalChamber’s Boot points out, there certainly is a lot to study here. Here are a few of the questions she had about the proposal:

– Who within the California Air Resources Board or the California Department of Tax and Fee Administration will determine the carbon intensity of every single product sold or used in California?

– How would they convey the specific carbon sales tax on every product? Would they do it on broad categories of products? Would that be fair if two companies make the same product with significantly different carbon intensities?

–How would such a tax impact lower-income Californians? Would it hurt their ability to buy meat and dairy products, including milk and formula?

–California’s sales-and-use tax is one of the most stable forms of revenue. If the carbon sales tax goal is to get Californians to purchase goods with the least carbon intensity, would that create budget volatility?

Boot correctly surmises that a carbon sales tax would create a seismic shift in our tax system. Hopefully this “study bill” will get the proper study it would require.


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