Thursday, May 19, 2022
Hawai'i Free Press

Current Articles | Archives

Sunday, January 2, 2022
Considering a Carbon Tax with Rebates
By Tom Yamachika @ 5:00 AM :: 1012 Views :: Environment, Tax Credits, Taxes

Considering a Carbon Tax with Rebates

by Tom Yamachika, President, Tax Foundation Hawaii 

The Hawaii Tax Review Commission, under our state constitution, convenes once every five years or so to examine and report on our state tax system. It recently published its report addressed to the Legislature

Its top recommendation is that the state enact a carbon tax, paid by suppliers of  petroleum  products or other fossil fuels. They recommended that the tax be imposed between $56 and $79 per metric ton of CO2 equivalent produced. (For gasoline, this translates to 39 cents to 54 cents per gallon.) And the Commission recommended it purely to disincentivize fossil fuel use to protect the planet, and not for the State to raise revenue.  The Commission estimated that the tax would raise between $450 million and $500 million a year and recommended that 80% of the tax be rebated to taxpayers.

To me, that sounds a little like asking the wolf to guard the henhouse and, after the wolf has stuffed a few chickens in its mouth, to politely ask the wolf to give most of the chickens back.

Why such doubt?  Just last year, our legislature enacted a huge change of heart toward revenue sharing. Our transient accommodations tax, the hotel room tax, had been shared with the counties for decades.  But under HB 862 (2021), the State took it all.  And this was after the Governor had vetoed the bill so providing.  The Governor said, among other things, that the State’s revenue picture didn’t look as bleak as previously forecasted (because we were going to get lots of money in aid from the federal government, for example) and we didn’t have the same pressure to shore up State revenues.  (Indeed, the rebound in this year’s tax collections is “astounding,” according to the Governor.)  The legislature nevertheless overrode the Governor’s veto. 

The Commission recommended that the State cut rebate checks either to all individuals or to all but the top 20% earners. I can easily see the Legislature turning this recommendation on its head, keeping the 80% for “immediate revenue needs” (Civil Beat quoted House Finance Chair Sylvia Luke as saying, “There’s too many needs out there and too many things we need to take care of that need immediate attention”), while perhaps rebating a smidgen of the money by either juicing up existing credits for lower income taxpayers like the Earned Income Tax Credit or the Food/Excise Tax Credit, or by enacting a new refundable credit.  In 2020, for example, the Legislature was considering a carbon tax.  SB 3150 SD1 (2020) proposed to impose tax at between $40 and $80 per metric ton of CO2 equivalent and allow a companion refundable credit of between $100 and $500 for a married couple, phasing out entirely at gross annual household income of $75,000.  (Subsequent drafts of the legislation changed the numbers in the bill to blank amounts, leaving taxpayers to guess what our lawmakers were thinking.)  The Commission’s recommended cashback per household, in contrast, is closer to $1,000 assuming the top 20% earners don’t get to participate in it.

And then, even if the carbon tax is enacted as recommended, it’s going to fall particularly hard on folks who live in suburban or rural areas and need to endure long commutes to everyday work.  The Department of Transportation, by the way, is independently studying (and hyping) a road usage charge that would make life even more costly for those commuters by replacing the gasoline tax with a tax based on miles driven. (Or at least they say the gasoline tax will be replaced, but the Legislature may well have other ideas on that point too.)

This, of course, is not the only recommendation the Tax Review Commission came up with. We will be discussing some of the other recommendations in coming weeks. 

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Life Alliance

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT