Roper: ESSEX carbon tax robs poor to pay rich

By Rob Roper

Chris Miller, who works on the Social Missions Committee at Ben & Jerry’s, testified to the House Energy & Technology Committee that his company is firmly in favor of the carbon tax bills (H.791/S.284) based on the ESSEX Carbon Tax Plan. Why? Because under the legislation, Ben & Jerry’s, which is owned by the British/Dutch company Unilever, will pocket an estimated $832,000 in electricity subsidies while avoiding the tax almost completely.

Rob Roper

Rob Roper is the president of the Ethan Allen Institute.

The way the ESSEX carbon tax works is distributors of fossil fuels will pay an excise tax of 32 cents per gallon for gasoline, 40 cents for diesel and heating oil and 24 cents for propane and natural gas. This cost, which will be passed along to customers, will go into a special fund that will be handed over to Vermont’s electricity providers in order to subsidize electric bills. Ben & Jerry’s uses a lot of electricity and very little fossil fuels. Miller explained that the ice cream manufacturer’s Vermont plants are almost entirely electric, and the company subcontracts its shipping needs to trucking companies based mostly outside Vermont. These subcontractors, Miller said, would likely never fill their tanks in Vermont, thus avoiding the carbon tax, and not incurring any cost that would be passed along to Ben & Jerry’s.

This is great for ice cream giant because they are part of a well-capitalized, multi-national corporation that has the resources to invest in the latest technology, and the geographic flexibility to best position itself to take advantage of government policies like the ESSEX plan. As such, they are able to extract much from the subsidy pool, while putting next to nothing in.

But, there is another side of this coin (many coins, actually) that ESSEX carbon tax supporters fail to mention, and that is the Vermont businesses — perhaps less capital rich and without the flexibility of scale — that will end up paying a lot into the pool but take out little. Who? Businesses that rely on fossil fuels, such as plumbers, electricians, contractors who depend on trucks and vans to reach their customers, and also the general store that has been around since 1850, heats with oil and isn’t well insulated. It’s folks like this who are going to be forced to pay $832,000 worth of Ben & Jerry’s electric bill.

It is also important to note that because Ben & Jerry’s is already fully invested in non-fossil fuel and efficiency technologies, the $832,000 in subsidies paid to them would do nothing further to reduce Vermont’s carbon footprint. Ben & Jerry’s is already as low as it can get. The ESSEX subsidy would just be a taxpayer funded gift to one of the state’s wealthiest business financed by many of its poorest. Is this fair? Is it smart?

This same dynamic will play out on the individual level. Under the ESSEX carbon tax the mom in the used minivan will end up subsidizing through her gasoline purchases the electricity bill of the hedge fund manager in the brand new $80,000 Tesla.

Even though the ESSEX carbon tax includes a rebate program for low-income and rural Vermont households, Rep. Sarah Copeland-Hanzas, D-Bradford, lead sponsor of the House version of this bill, confessed that a hypothetical single mother living in a rural part of the state (someone qualifying for the maximum amount relief) would still have to invest in an electric vehicle, electric heat pump or some such thing in order to come out ahead under the ESSEX carbon tax. If said single mom doesn’t have or cannot find the financial capital necessary to do this, the scheme will be a net drag on her financially.

However, wealthy Vermonters who have the financial wherewithal to install solar panels, buy Priuses and live in newer, better insulated housing can take full advantage of the ESSEX plan. The subsidies they receive are provided courtesy of Rep. Copeland-Hanzas’ single mom.

During a meeting of the Vermont Climate Caucus, a group of environmentally focused law makers, one member raised this concern: “It seems to me that if you’re among the most wealthy Vermonters you could easily save a lot more than lower income [Vermonters], because if you have fossil fuels heating your home you can go out and buy a pellet stove, you can go buy heat pumps, you can go buy a Tesla, and you won’t even notice the bump in your budget. … You’re reaping all the benefit. How is this helping lower income Vermonters?” Sen. Chris Pearson (D/P- Chittenden), lead sponsor of the senate version of the bill, responded, “Yeah, it would be a good problem to have if wealthy people stopped using fossil fuels to heat their homes and drive around. I mean, that is the goal.”

Is it? Well, thanks for letting us know.

Rob Roper is president of the Ethan Allen Institute.

Image courtesy of Public domain
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3 thoughts on “Roper: ESSEX carbon tax robs poor to pay rich

  1. The carbon tax will either drive people from their homes or else require them to seek assistance to heat their homes. Plus it will eat up more of their pay check just to drive to work.

  2. Senator Bray of Vermont does not get it.

    He announced he wants to eliminate the sales tax on the first $30,000 cost of buying an EV. He wants to SHIFT the burden of sales taxes from a few UPSCALE-income buyers of electric vehicles onto all other taxpayers. That means upscale-income people benefit at the expense of others.

    This means 1) an $1800 saving for the upscale-income buyers, 2) the state having less revenue and 3) the state having bigger CHRONIC deficits, and 4) other taxpayers paying more. There is no free lunch, except in LaLaLand.

    Legislators like Bray have been giving away the store to please RE constituents for at least a decade.
    Did Vermont’s annual CO2 decrease due to all these RE giveaways these last 10 years? No!
    Throw more money at it? Oh yes, says Bray and other legislators.
    All the hyping about reducing CO2 to save the world was just to bamboozle the long-suffering Vermonters.
    http://www.windtaskforce.org/profiles/blogs/subsidized-solar-systems-cause-chronic-budget-deficits-in-vermont

    Legislators sponsoring carbon taxes likely have near-zero experience designing energy systems and the economic impacts of their mandates. About 25 Democrat legislators just get on the carbon tax bandwagon with their Essex Plan and rah-rah along.

    – Legislators and Vermonters have no idea how much has been given away in terms of tax credits, subsidies, accelerated write offs, surcharges and fees by various energy bills and mandates over the years.
    – No rational central accounting exists. The numbers are all spread over the place, likely on purpose.
    – Almost nothing it properly vetted and exposed to the public.
    – The state auditor likely knows about some of it, but apparently ignores it.

    The RE shenanigan factor is much bigger than the $200 million EB-5 fraud (the largest ever in the US), and $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 unilateral carbon tax, $240 to $300 million PER YEAR, would further aggrandize state government, would raise the ante of foolish spending by about a factor of 3 – 4, and increase social discord.

    Vermont Lagging Behind Other NE States: Vermont has been sliding backwards regarding economic growth, compared to other NE states during 2012-2016, because of various expensive follies, such as:

    – The huge adverse impact of all the state mandated, expensive, subsidized renewables
    – The state usurping dominance in centralizing control of education, instead of local control of education
    – Socialist-style experimenting with healthcare systems
    – Vermont having a bloated, inefficient government that suffocates the private sector.

    These follies have become an increasing headwind that further reduces the near-zero, real-growth of the anemic Vermont economy.
    http://truenorthreports.com/the-essex-plans-exaggerated-growth-claim

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