Our tax policies punish environment, public health and low-wealth families
By Frank Carini / ecoRI News columnist
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Not taxed in RI
For all the attention the income tax receives, the tax
burden for most Americans comes primarily from payroll taxes, not income taxes,
according to a 2019 report by the Joint Committee on Taxation.
Americans with less than five-figure incomes pay an
effective payroll tax rate of 14.1%, while those making seven-figure incomes or
more pay just 1.9%, according to the Center for American Progress..webp)
Taxed
Most states make their low-wealth residents contribute a
greater share of their income to taxes than their wealthy ones. Nationwide, the
share the lowest-income earners pay to state and local taxes is 54% higher than
what the top earners pay, according to the Institute on Taxation and
Economic Policy.
It’s time we get creative, and fairer — for human and
environmental health and humankind’s future — when deciding how and what we
tax. We need to switch the tax onus away from things that don’t pollute and
waste resources to things that do.
We can start by taxing the utterly useless so heavily
that we no longer make plastic shower curtains with pockets for electronic
devices so we can read emails and text messages in the shower; miniature leaf
blowers designed as mini-dust blowers, to keep keyboards and computer areas
clean; dog selfie sticks; plastic cups to hold hamburgers; perfume that smells
like dirt; and K-Cups.
Most of this hogwash is made of polluting plastic. We’re
extracting, transporting, and burning fossil fuels to manufacture rubbish.
We’re devouring the planet for cheap laughs and frivolous convenience.
We should provide a tax break for those who don’t own a
vehicle. Also, stop taxing bicycles, skateboards, in-line skates, and walking
shoes.
Tax heavy polluting transportation choices at a far higher rate. For example, jack up the sales and excise taxes on petroleum-gulping sport-utility vehicles, Hummers, and supersized pickups — even those powered by battery, as they devour resources and make our roads unsafe. Do the same for private jets, yachts, powerboats, snowmobiles, Jet Skis, and all-terrain vehicles.
Sadly, higher taxes likely won’t impact the sale of these
carbon-spewing machines, as we seem to love to pollute despite the severe (and
known) costs, but it could raise money for underfunded climate change and
public health initiatives. It could also fund heat pump rebates and rooftop
solar incentives.
For example, sales of SUVs, which are responsible for a
huge chunk of climate emissions, have soared worldwide in the past decade, even
as mounting evidence of the climate crisis routinely smacks us in the face.
Sales have risen from 20% of new vehicles in 2012 to 46% of all vehicles last
year, with noticeable growth coming in the United States, according to
the International Energy Agency.
Despite a “strong increase in sales of electric models,”
it wasn’t enough to prevent carbon dioxide emissions from SUVs worldwide
reaching almost 1 billion tons in 2022, according to the agency. To put it
another way, if SUVs were a country, they would be the world’s sixth-biggest
carbon polluter.
If we had a fair and functioning democracy, for instance, elected officials would impose a hefty tax on private jet owners and passengers (better yet, ban them; the jets, not the people), but instead, the cost of a private jet can be used as a tax deduction.
Teachers can write off only $300
for classroom supplies, but CEOs can write off the full cost of their jets.
Show me in our ridiculously skewed tax code where
mere common folk enjoy a similar tax break as those offered to jet and yacht
owners.
In Rhode Island, the state’s no-sales-tax policy on
boats, including yachts, went into effect in 1993, thanks in large part to the
lobbying efforts of the Rhode Island Marine Trades Association. Good policy for
canoes and kayaks, but shortsighted for powerboats and yachts. There also is no
boat excise tax in Rhode Island.
A 2019 blog post on a Newport-based
yacht seller notes “you don’t have to live in Rhode Island to take advantage of
these exemptions. According to the most recent statistics, approximately half
of the registered boaters in Rhode Island live in other states.”
The super wealthy always win, even when it fuels the
climate crisis and diminishes public health.
Speaking of the ultra-rich, heavily tax space tourists
and those who provide the unnecessary indulgence. Better yet, ban for-profit
rocket rides.
In fact, taxes on all fuel, including jet and rocket,
need to be higher. The federal tax on gasoline, which funds
transportation infrastructure maintenance and repair, is 18.4 cents a gallon
and 24.4 cents a gallon for diesel. The rate of the federal gasoline tax has
been increased 10 times since 1933, when it was $0.01 a gallon, but it has not
been touched since 1993, when it went from 14.1 cents to its current rate.
The average state tax on gasoline and diesel is 31.6
cents and 33.8 cents, respectively.
But instead of raising taxes on these fossil fuels, even
as wildfires spread, floodwaters rise, and droughts intensify, oblivious
elected officials would rather score political points.
In Connecticut, a scheduled increase in the state’s tax
on diesel fuel didn’t go into effect this year — the result of a
little-discussed provision in the state budget that halted the annual
adjustment of the tax.
Connecticut’s diesel tax is set through the combination
of two elements: a flat, 29-cent rate and a variable rate calculated based on
the previous year’s wholesale cost of diesel. Last year’s annual adjustment
caused the diesel tax to increase from 40.1 cents a gallon to its current 49.2.
Lawmakers then sang a familiar tone-deaf tune. They
estimated the waived adjustment would save Connecticut consumers more than $37
million, according to a story in CT News Junkie.
“I’m pleased that the budget cancels a planned increase
in the diesel fuel tax that had been scheduled to go into effect,” Senate
President Martin Looney is quoted. “We are constantly trying to improve
Connecticut’s business climate, and make us more competitive, whenever
possible.”
No mention was made of trying to mitigate the climate
crisis
Last year in Rhode Island, with gasoline prices on the
rise, some lawmakers called for the suspension of the state’s gas tax. Rhode
Island taxes gasoline and diesel at 34 cents a gallon. The Rhode Island Public
Transit Authority is funded in large part by revenue generated by the state’s
gas tax. The tax also helps fund the transportation infrastructure, including
the filling of potholes, on which motorists rely.
The best solution to high gas prices is not to increase
demand for gasoline by making driving cheaper, but to encourage
alternatives to gasoline consumption by promoting, supporting, and funding
public transit and pedestrian and bicycling infrastructure.
Improving, not gutting, public transit and making walking
and biking safer and easier would also help mitigate the climate crisis.
But when it comes to transit choices that would benefit low-income and non-car-owning (and non-yacht- and non-jet-owning) populations, the political appetite for action vanishes.
The desire to keep the wealthy and
powerful happy — so they donate to campaign coffers, host lavish fundraisers at
walled-off estates, or put in a good word for your reelection — routinely
supersedes public health, climate change mitigation, and the widening
inequality gap.
Rhode Island lawmakers for the most part are against
proposals looking to make riding RIPTA free. Last year an amendment to Rhode
Island law to exempt bicycles from the state sales tax was held for further
study. Sales tax on bicycles and skateboards but not yachts and powerboats says
it all.
The spewing of climate-changing emissions isn’t limited
to machines that churn up waterways, rumble over pavement, or speed through the
air. We also burn a ridiculous amount of polluting fossil fuels mowing an
estimated 40 million to 50 million acres of lawn in the continental United
States — nearly as much as all of the country’s national parks combined.
Three billion gallons of gasoline was consumed in 2020
to maintain this monolithic landscape — the equivalent of adding some 6 million
cars to our roadways.
The sales tax on air- and noise-polluting lawn-care
equipment, most notably leaf blowers, also needs to be raised. Better yet, ban
the use of leaf blowers.
