Carbon tax rebate? Don’t count on it.

By David Flemming

Last November, environmental activists released the “ESSEX” Carbon Tax Plan that called for legislation taxing fossil fuels and giving the money that was not used for administering the program back to Vermonters in the form of lower electric rates and rebates for low-income and rural Vermonters. Within the Statehouse halls, the carbon tax has become a hot topic as it has now moved from a concept to actual legislation. We pointed out the inevitable complexities of ESSEX bill last week.

But perhaps more disturbing are the discrepancies between the bill that has been introduced a couple of weeks ago and the PDF the environmentalists released last November. This is important to point out because some members of the general public may end up supporting a bill that is only a figment of their imagination, while the real bill is something else entirely.

According to the ESSEX proposal of November, “households up to 400% of FLP (Federal Poverty Level) were considered eligible” for the low income rebate. However, if we read the bill released by Sen. Chris Pearson (who had promised to support ESSEX in December), it says: “To be eligible for the rebate … the customer’s annual household income shall be below 300 percent of the federal poverty level.” So, 300 percent vs. 400 percent, why should that make a big difference?

According to ESSEX November, 400 percent of FPL is $90,000/year for a family of four, which means that 300 percent of FPL is $67,500 for a family of four. So, if you supported the ESSEX plan because of the low-income rebate and you have an income between $67,500 and $90,000, you can no longer count on that rebate. How many Vermont families would this change effect?

The data that ESSEX November uses from the Kaiser Family Foundation (KFF) does not provide a conclusive answer to this question. The KFF uses three income brackets to map the state of Vermont, rather than the four income brackets in ESSEX November.

ESSEX November uses two distinct income brackets for the low income rebate, “200-300% FPL” and 300-400% FPL” while the KFF combines both of those brackets into a single one “200-399%” FPL. As of 2016, KFF reports that 197,300 Vermonters are in this bracket. Some of those Vermonters would still qualify, but unless we were to delve deeper into the data than VPIRG and their ilk has done, we won’t know the answer. If we split the KFF bracket down the middle, then about 99,000 Vermonters would be no longer be eligible for the low-income rebate if ESSEX January were to go into effect, rather than ESSEX November.

This is a cautionary example of why we must be eternally vigilant when dealing with politicians. Bills can change radically between concepts and ratification, and even after ratification, laws can be changed. If it happened in the private sector, it would be called bait and switch.

David Flemming is a policy analyst for the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Flickr/

12 thoughts on “Carbon tax rebate? Don’t count on it.

  1. Regarding carbon taxes and cost shifting, Senator Bray does not get it yet.

    He keeps on proposing SHIFTING taxes from a few electric vehicle buyers to many other taxpayers.
    He announced he wants to eliminate the sales tax on the first $30,000 cost of buying an EV. That means the upscale people benefit.

    This amounts to an $1800 saving for the upscale buyers, the state having less revenue, having bigger CHRONIC deficits, and other taxpayers paying more. There is no free lunch, except in LaLaLand.
    People like him have been giving away the store to please RE folks for at least a decade.

    Did Vermont’s CO2 go down these last 10 years? No!!!

    All the hyping about reducing CO2 was just hot air to fool the long-suffering, bamboozled people.
    Vermonters have no idea how much you, et al., have given away over the years.

    No rational central accounting exists. The numbers are all spread over the place on purpose.
    Nothing it properly vetted and exposed to the public.

    The state auditor, who loves RE, likely knows about it, but apparently ignores it.
    Efficiency Vermont, annual budget about $65 million, is a notoriously wasteful quasi-government program.

    The shenanigan magnitude of this is much bigger than the $200 million EB-5 fraud, or $200 million healthcare website fiascos.

    When recurring revenue gaps occur, legislators and bureaucrats pretend to have not a clue as to how that came about.

    A carbon tax, $300 to $500 million PER YEAR, would raise social discord.
    A carbon tax would raise the foolish spending ante by about a factor of 5.

    On a lifecycle basis, which is the only basis that counts, the CO2 emissions of EVs are on par with high-efficiency hybrids.

    Dirt roads, with snow and ice, going uphill, and during a cold day, would make an EV about as sluggish as molasses.

    In New England, only 4-wheel-drive, plug-in hybrids make any sense.

  2. The Essex Plan is not innovative.

    A unilateral carbon tax would be harmful to the anemic, near-zero, real-growth Vermont economy.

    It would ultimate raise about $240 million to set up redistributionist government programs collect money from people and to distribute most of it to special interests, energy related or not. Some of the money, likely about 10%, would be used for administering, etc.

    The Vermont Comprehensive Energy Plan would require about $1.0 billion per year for each year of the 2017-2050 period.

    Such a pile of money would be too tempting for legislators to ignore.

    Every pressure group would line up, to get a piece of the pile, just as with the ARRA funds, and every legislator would want to perform constituent service.

    Vermont has reduced its energy consumption during the past decade, which means its CO2 emissions have been reduced as well.

    It is likely folks doing the CO2 bookkeeping follow rules that are not based on reality.

    An example is ISO-NE attributing a CO2 quantity to Vermont for electricity generation, and that quantity is less than McNeal and Ryegate reported to the EPA, and these two are not the only CO2 emitting electricity generators in Vermont.

    That leads me to conclude the bookkeeping accuracy is inadequate.

  3. I am retired, having paid a couple of years of federal and Vermont State income taxes post-retirement. Last year, my federal return yielded an approximate $1000 refund. The state said I owed ~$2000. Currently I am not only dodging Vermont’s global warming induced ice age in sunny and state income tax-free south Florida, I am looking into options for fleeing Vermont’s tax-addicted, confiscatory, Social Security-taxing political fiefdom for an alternative that will not leave me destitute ten years from now. I leave you with a serious warning. As Vermont’s aging population approaches retirement, more people will follow me- up and out.

  4. And the population keeps voting these clowns into the legislature. Lets have a state electoral system where every county has a vote that counts, then it won’t be those few progressive counties that get to control the future of Vermont.

  5. Once the carbon tax is in what guarantee do we have that it will not go up as the guys in Montpelier find more ways to spend this wind fall????????????

  6. Even the Energy Efficiency Fee (TAX) won’t go away. It even gets increased by the legislature. I would really like to see where all the funds go. They are not just education and rebates.
    I put in 10K of solar panals and I still cannot get rid of that dang fee! Harder to get rid of than scabies!

  7. If there are any Vermonters who believe that they will see money coming back to them…………..I have a wonderful bridge between Vermont and New Hampshire that I will sell you. I absolutely guarantee you that the value of it will sky rocket over the next five years. I will take the proceeds of the sale and purchase 10,000 gas cans which I will then turn around and resell on the NH side of the border to all of the poor Vermonters who will be trying to take gas, diesel, and home heating oil home with them on their way home from their job in New Hampshire.

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