TCI: Taxing the Poor to Benefit the Rich

New Jersey environmental justice advocate Maria Lopez-Nunez, lower left, speaks with organizers of the Transportation and Climate Initiative on September 29. Hear her here.

By Steve Haner

“I think TCI is just taxing poor people so that we can subsidize rich people’s electric cars.” 

So said New Jersey’s Maria Lopez-Nuñez, Deputy Director, Organizing and Advocacy for the Ironbound Community Corporation. She was speaking during an online seminar September 29 organized by Transportation and Climate Initiative advocates.

That particular comment can be heard at about 3:10 into this recording of her speech. The full meeting is recorded here, and her remarks start at about 1hour and 43 minutes in. Listen to her whole speech if you can. Listen to those that follow and you will learn she was not alone.

Lopez-Nunez is dead on correct that TCI imposes a major and very regressive tax to deliver minor reductions in CO2 emissions, and that moving people into electric cars merely moves the source of CO2 emissions from the roads to the power plants.

Run the projected CO2 emissions savings from TCI through the climate change models at the heart of this whole worldwide debate and the result is infinitesimal changes in the feared future temperature increases. Selling this as saving the planet is not credible, so the push is on to find a new rationale. The effort to make that “environmental justice” by targeting the tax money to their causes is not being well received.

Earlier this week, Governor Charlie Baker of Massachusetts indicated he and other governors are reconsidering this new tax and cap scheme for fuels in the middle of a deep recession. The discontent flowing back from the low-income, racial-justice and environmental-justice crowd TCI sought to recruit may also be weighing on their minds.

That is a typical used price. One promoted use of the TCI carbon tax extracted from all gas or diesel purchases would be subsidies for electric cars.

Our Governor Ralph Northam has said nothing about his plans in Virginia, or whether he was one of those Baker was discussing. The Virginia media is not asking. Despite the short time left before the session, the actual memorandum of understanding is still being held secret.

Lopez-Nunez’s comments during the meeting were followed by a formal call from her organization for New Jersey to reject membership in the 12-state compact with its carbon tax on gasoline. Her group’s denunciation was joined by Clean Water Action New Jersey and NJ Environmental Justice Alliance.

Their complaints are spelled out in a release. They state TCI:

  • Fails to mandate pollution reductions. TCI’s reliance on direct and indirect trading is likely to disproportionately impact EJ communities — calling TCI “cap and invest” rather than “cap and trade” doesn’t change that.
  • Proceeds are not put in a lock box. There is no guarantee that funds collected will benefit climate initiatives and EJ communities. History is almost certain to repeat itself regardless of who is in office.Billions of dollars of “dedicated” funds have been raided from NJ programs like NJ Transit, Clean Energy, lead mitigation, and more for unintended purposes.
  • Commitment to “transparency” and “equity” rings hollow and has, in the past, failed to create a meaningful decision making role for EJ voices.
  • Imposes a regressive gas tax fee structure, not a true polluter-pay mechanism. Despite recent increases to the gas tax and tolls, the cost will be passed on to those that can least afford a tax hike or an electric car, instead of making companies pay for their pollution and contribution to climate change.
  • Better solutions exist. Federal and state regulatory and financial authority is already substantial and more effective.

“TCI to date has been tone deaf at best and racist at worst,” Lopez-Nunez is quoted in the release. “The world is on fire and we need bold, visionary solutions that center those most directly impacted to build a just society. We will not settle for half measures that uphold decades of bad policy development in the way TCI has.”

The 2021 Virginia General Assembly will be asked to authorize Virginia’s membership in TCI. It should be done in legislation, but there is a chance the Northam Administration will try to sneak it through with budget language. The basic workings of the compact have been explained before and will be again, but many details are still shrouded in that missing MOU. Will we see it before or after the legislators are asked to vote?

The first carbon tax to be imposed on Virginians, part of a similar interstate compact known as the Regional Greenhouse Gas Initiative, will add about 2% to electric bills starting next summer. Early information from TCI has mentioned that the carbon allowance will add about 17 cents per gallon to the price of gasoline (about an 8% increase), but its own internal documents point to a first year cost more like 20 cents per gallon, growing to more than 30 cents by 2032. A review requested by the Thomas Jefferson Institute for Public Policy projected 33 cents per gallon.

The proposed 25-percent reduction in CO2 emissions from fossil fuels will be accomplished not by the tax, but by a cap on the sale of gasoline and diesel fuel within the Maine to Virginia region. The number of allowances available under the cap to fuel wholesalers will slowly shrink. With a market move already underway to electric or hybrid vehicles, much of the goal will be achieved without this regime.

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28 responses to “TCI: Taxing the Poor to Benefit the Rich

  1. Well then, we have this:

    ” GM: New batteries cut electric car costs, increase range
    DETROIT (AP) — General Motors said a pending breakthrough in battery chemistry will cut the price of its electric vehicles so they equal those powered by gasoline within five years.”

    https://www.newstribune.com/news/business/story/2020/nov/20/gm-new-batteries-cut-electric-car-costs-increase-range/849792/#:~:text=Matt%20Rourke%2C%20File)-,DETROIT%20(AP)%20%E2%80%94%20General%20Motors%20said%20a%20pending%20breakthrough%20in,as%20much%20as%20450%20miles.

    Seems like we go through this with a lot of newer technology.

    For instance the first cell phones were a disaster as well as costly beyond the reach of all but the rich.

    We’re going to see a similar improvement in cost and functionality with electric cars…

    If the money collected is plowed back into incentives, energy conservation and perhaps more solar – then is it any worse than current tax incentives for energy conserving stuff?

    And Consumer Reports thinks EVs cost almost 5K less to maintain than gasoline-powered vehicles – that ought to be a big help to lower income folks who sometimes end up with older clunkers in need of repairs.

    www [dot]consumerreports.org/car-repair-maintenance/pay-less-for-vehicle-maintenance-with-an-ev/

    • Yeah, that justifies screwing poor people and the middle class with a massive tax on a vital commodity. The point is they peddled that to a group of activists and it blew up in their faces.

  2. Will government officials “steal” the money and divert it? Of course they will. Everyone in the United States pays a surcharge on their phone bills to fund 911 emergency call answering services. The money is supposed to go solely to operate the critical system that can enable faster dispatch of police, fire and EMS services. But dirty politicians have diverted billions. ttps://www.naco.org/articles/legislation-would-stop-diversion-911-fees#:~:text=The%20911%20Fee%20Integrity%20Act%20would%20prevent%20states,programs%2C%20according%20to%20Federal%20Communications%20Commission%20%28FCC%29%20reports.

    Expect more fraud and abuse. Access to other people’s money. Let’s do it again.

    • Where can I get a GreenTech electric golf cart? You know, those cool little electric cars being built by the company started by Terry McAuliffe and Tony Rodham? Of course the liberal elite will use TCI to shear the sheep for their own personal enrichment.

      How much money did “Slick Terry” personally lose on GreenTech? The State of Mississippi lost millions. The immigrants who invested in order to get visas lost millions. How much did Terry lose?

  3. If you are trying to reduce CO2, there is a lot that can be done. A hybrid car like a Toyota Prius is near zero emissions, oodles of room inside the car, and new ones pushing 55 MPG, and you can get a plug-in version.

    One problem is GM/Ford want to mandate all-electric cars, and the reason they give is: that unlike Toyota, GM and Ford want to do the right thing for the environment.

    Um, does anyone else think that sounds a little fishy? Toyota/Honda are not too interested in all-electrics, because Japan sees a need to diversify energy fuel-use, and not ban petroleum. So if USA could ban hybrids and gassers, then Detroit would be in the best position to meet USA mandates, without so much competition from Toyota/Honda on hybrids.

    To me, in USA, we are less worried about reducing CO2 and more worried about mandating the politically-correct energy choices.

  4. I can see it. Wait! I thought youse Republicans are always fond of saying that the top 1% pay 90% of the taxes?? So, no. It’s their OWN tax money.

    Well, you can always throw a 4% tax on cars over $75,000 and boats over $250,000 not documented as commercial fishing vessels to pay for it. I like luxury taxes.

  5. So, the social-justice crowd is finally getting wise. Good to see it. The does put Ralph Northam in a difficult position, doesn’t it? Does he side with the predominantly white global-warming environmentalists or with the predominantly PoC social justice crowd.

    Pass the popcorn. I’m going to enjoy seeing how this plays out.

    • I suspect the power brokers will get these people in line, or find others to counter the skeptics. This is way more vulnerable (and frankly destructive) than RGGI. This can be taken down even in a Democrat-controlled legislature. The carbon tax on RGGI is like $6 a ton, and this will be $20 to $30 or even $40 per ton. We just need to get the word out. Plus it doesn’t work – didn’t work in CA and isn’t working in Europe.

      Next summer the gas tax in VA goes to 33.8 cents per gallon (34.4 including an underground tank fee). In many places it was 16 cents just a few weeks ago. As a legislator would you like to tell voters why you voted to raise it another 50-100%?

    • A sobering look at the trade-offs and costs vs. benefits of various proposed solutions to climate change is set forth in Bjorn Lomborg, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet (Basic Books, 2020). Lomborg accepts that climate change requires action, but argues that there is a need to assess the proposals, evaluate their cost effectiveness, and consider whether there are better alternatives.

      Jim Bacon’s comment highlights the perils of intersectionality, which has been spawning a contested hierarchy of grievances and victim-status that pits groups against each other.

  6. Interesting article:

    ” The Political History of Cap and Trade
    How an unlikely mix of environmentalists and free-market conservatives hammered out the strategy known as cap-and-trade”

    ohn B. Henry was hiking in Maine’s Acadia National Park one August in the 1980s when he first heard his friend C. Boyden Gray talk about cleaning up the environment by letting people buy and sell the right to pollute. Gray, a tall, lanky heir to a tobacco fortune, was then working as a lawyer in the Reagan White House, where environmental ideas were only slightly more popular than godless Communism. “I thought he was smoking dope,” recalls Henry, a Washington, D.C. entrepreneur. But if the system Gray had in mind now looks like a politically acceptable way to slow climate change—an approach being hotly debated in Congress—you could say that it got its start on the global stage on that hike up Acadia’s Cadillac Mountain.

    People now call that system “cap-and-trade.” But back then the term of art was “emissions trading,” though some people called it “morally bankrupt” or even “a license to kill.” For a strange alliance of free-market Republicans and renegade environmentalists, it represented a novel approach to cleaning up the world—by working with human nature instead of against it.”

    https://www.smithsonianmag.com/science-nature/the-political-history-of-cap-and-trade-34711212/

  7. “Our Governor Ralph Northam has said nothing about his plans in Virginia, or whether he was one of those Baker was discussing. The Virginia media is not asking.”

    Ralph “The Mime” Northam isn’t speaking? You don’t say.

    Northam really is an arrogant and condescending little man, even by the low standards of Virginia’s plantation elite. He sees no reason to waste his valuable time being transparent with the people of Virginia. They are, after all, only sheep to be sheared by the elite and their cadre of useful idiots.

  8. If you did do cap and trade, it needs to be a totally closed system where only those businesses that buy and sell carbon-based fuels can buy or sell credits. The government is too corrupt to be involved. See the misuse of fees paid to support 911 service. If the dirt bags (both elected and policy making employees) will stiff the entity that receives emergency calls and dispatches first responders, imagine what they will do to carbon credits.

    It should be a felony for any outside person or entity to purchase and sell credits, keeping Wall Street and other investors out of the market. If you are a business that can operate with less carbon emissions than you are permitted, you can sell yours to some other business that can be as efficient. As for mandating energy efficiency, which is government commanding technological improvements, just how well will that work? If you cannot cut consumption, you cut employee costs.

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  13. Will admit this does give pause for thought. Yes, TCI does seem like a regressive tax. However, I clicked through some of the links to get a better idea of what the New Jersey environmentalists are saying. What they want is a comprehensive FEDERAL program to deal with carbon emissions from cars, more public transit, etc. Why no federal program. Donald Trump of course. He has seriously backtracked on the progress made no containing carbon. After he’s finally gone, there will be opportunities for revision.
    I still like RGGI, though.

    • I’m not done writing about this (0bviously on a campaign here) but a couple of previews. Setting aside the argument over whether CO2 is some global thermostat, the transportation industry is rushing toward EV and hybrids and higher fuel efficiency, and much of that has been in response to federal or state demands. Customers want it. Subsidies already exist. This program really is gilding the lily.

      RGGI is similar, in that the goals it sets are a cakewalk for a power industry that was already abandoning coal. Virginia joined just for the tax $$$, the VCEA already forced the expansion of wind and solar. Joining or staying out of the Paris Accord will mean nothing with regard to CO2 emissions here or around the world, or possible future warming. It will mean we American taxpayers start sending more econ-foreign aid to a bunch of countries who will laugh and then do what they want.

  14. Obviously I disagree on most of these points. Anyway, when I researched my book on coal nearly 10 years ago (which included trips to China, Mongolia and Japan), I noted this piece by James Fallows in The Atlantic. He says that as the Chinese move towards more coal plants, younger engineers are pushing for much greater carbon abatement gear built it. Maybe wishful thinking.

    https://www.theatlantic.com/magazine/archive/2010/12/dirty-coal-clean-future/308307/

    Fallows notes that China has lots of money, so I kinda doubt they will be asking Washington for help. The real culprit is India.

    I also will be writing more about carbon.

    • So why don’t the extreme environmentalists call out India? How many environmentalists drive to work? I remember that a decade or so ago, one of the leaders of the Piedmont Environmental Council explained at public meeting that he lived in Arlington and commuted out west. Arlington was a more environmentally friendly.

  15. When we look at what we did agree to do with regard to Acid Rain, CFCs, more efficient, less polluting cars, and the Chesapeake Bay, it’s clear that both a majority of citizens as well as corporations want to go this way.

    Our cities have cleaner air than decades. The Ozone holes are smaller and gradually improving. Trout are once again found in mountain streams.

    Yes, there is still a substantial number of people opposed – who have pretty much always been so PRIOR to the steps taken then after, they join in with the rest saying it is better.

    We all have a responsibility to accept the fact that we do pollute and we need to be responsible for cleaning it up and even better, don’t pollute to start with if we can.

    This fight has been ongoing for a while and there are two sides and we know who we are.

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  17. Why does this not justify a nationwide boycott of the Ford Motor Company, ops Ford Battery Company that now is paid for off the backs, sweat, savings and tears of America’s middle and lower classes? Boycott Ford!

  18. Baconator with extra cheese

    I brought up India and China to a friend who is all in on the Paris Accords. He said well we’ll just have to “force” China and India to reduce carbon… I asked if by “force” he meant war or tariffs (which he previously said were proof of Orangeman-Bad’s racism against Chinese)…. that seemed to stun him… he had no response to what “force” meant…. maybe restorative justice perhaps?
    Yes they will take our American money and laugh… and I can’t blame them for that. I’m planning to start doing the same thing. There is no way I’m continuing to work and pay taxes if everything’s going to be “free”.

    • Well, the serious suggestion on that — which the Biden Administration may look it — is use of tariffs to impose the equivalent of carbon taxes on imports from those countries Not In Line With Science! Australia may be first, not China. It will be more than a little ironic if the Biden go-to tactic is tariffs, considering all the angst (including mine) over Trump’s tariffs.

  19. How do other countries follow the US?

    Well, look at leaded fuel which we phased out decades ago. Did other countries follow?

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