Contact: Rob Roper
Today the Transportation Climate Initiative (TCI) is supposed to unveil its draft memorandum of understanding that, if adopted, would create what is essentially a regional carbon tax on motor fuels throughout thirteen Northeastern and Mid-Atlantic states. The hit to Vermont drivers could be as high as an extra 18 cents per gallon for gasoline and diesel, and that’s just to start. The added cost to motor fuels would increase every year with the intent of making it so economically painful to use these fuels customers will be compelled to abandon them – whether or not viable alternatives exist as replacements. This is a cruel policy.
The concept behind the TCI carbon tax is regressive in nature, hurting low income people disproportionately, and it will disproportionately penalize rural states where citizens are more reliant on their vehicles for work and the other essentials of life. Vermont, being a rural state, will assuredly end up as one of the states holding the short end of the stick in this agreement. We will pay more into the program than we will get out of it. As such, it would be foolish for Vermont to agree to take part.
The Ethan Allen Institute has played a key role in putting together a multi-state collaborative in opposition to the TCI carbon tax. Today these organizations released the following open letter:
We, the undersigned, represent citizens and businesses in states currently considering participation in an interstate compact known as the Transportation and Climate Initiative (TCI), a carbon tax “cap and trade” proposal for reducing carbon dioxide (CO2) emissions from fossil motor fuel use.
While the specific details of the TCI are expected to be released on December, 17th, 2019, the framework was made public in October and the primary purpose behind the idea is not in dispute. The TCI is intended to make purchasing transportation fuels so painfully expensive that the astronomically high price discourages people from buying it. In short, consumers will have to pay more at the pump to fund increased government spending. Make no mistake, this is a tax. More precisely, it is a carbon dioxide tax being implemented through a gas tax.
But, unlike motor fuel taxes levied to pay for roads, bridges, and transportation infrastructure (a reasonable fee for use), the TCI would be the equivalent of a “sin tax” – a penalty for engaging in bad behavior. We do not believe that driving to and for work, transporting children to school, transporting goods, going to the grocery store, and all the other necessary activities that generally require a vehicle should be treated by governments as a sin. These are not activities people can, or should be forced to, avoid.
The TCI will also increase state and municipal spending, as public services such as snow plowing, collecting garbage, and transporting school children will be burdened with significantly higher fuel costs. Furthermore, fuel-reliant small businesses that transport goods or provide services will suffer higher operating costs. Those increased expenses ultimately will be passed along to consumers and taxpayers. Citizens in TCI states can expect to be hit with higher personal costs, higher costs for goods and services, and higher taxes.
Gas taxes are regressive in nature. The TCI will hurt lower-income and rural residents much more significantly than their higher-income, urban peers. Since motor fuels are economically “inelastic,” the higher costs imposed by the TCI’s fuel tax will have to come out of other areas of household budgets. People already struggling to make ends meet will be forced by their own governments to make painfully difficult choices. Economically speaking, this is bad policy. Morally speaking, it’s just cruel.
Among the 13 Northeastern and Mid-Atlantic states currently contemplating joining the TCI are some of the most heavily taxed in the nation. Adding another significant burden to the already over-taxed families of these states is neither desirable nor fair. The first formal details of the TCI come out this month and will certainly raise more questions and concerns about the constitutionality of the program. State legislatures, legally required to or not, should vote on any proposal for their state to join the TCI. Legislators should not allow one citizen of a state — the governor — to impose such serious financial burdens on all other citizens. Such a decision rightfully belongs to the people’s representatives and should be reached through the legislative process, not by the decree of a single executive.
The TCI is a poorly conceived, fundamentally regressive, and economically damaging proposal. It would — on purpose — make the day-to-day transactions of life painfully expensive, especially for those of us who are going through bad times and are struggling every day to get by. Government should not do this to its citizens. Government exists to serve the people, not to bend them to the will of elite opinion. For these philosophical and financial reasons, states should reject the TCI at the first available opportunity.
Carol Platt Liebau
Yankee Institute for Public Policy, CT
Christian N. Braunlich
Thomas Jefferson Institute for Public Policy, VA
Paul D. Craney
Fiscal Partners, MA
Rhode Island Center for Freedom and Prosperity, RI
Grover G. Norquist
Americans for Tax Reform, DC
Massachusetts Fiscal Alliance, MA
Ethan Allen Institute, VT
Chrisopher R. Summers
The Maryland Public Policy Institute, MD
Chief Executive Officer
Citizens Alliance of Pennsylvania, PA
Christopher R. Carlozzi
NFIB in Massachusetts, MA
Chief Executive Officer
Maine Heritage Policy Center, ME
Unshackle Upstate, NY
Citizens for Limited Taxation, MA
Josiah Bartlett Center for Public Policy, NH
Caesar Rodney Institute, DE
Thomas J. Pyle
Institute for Energy Research, DC
Garden State Initiative, NJ