California voters weigh new tax on the rich to boost electric cars

California Governor Gavin Newsom discusses Proposition 30, a tax measure for wealthy residents. Newsom opposes the measure that has divided Democrats. (Getty Pictures)

SACRAMENTO, Calif. – Should California’s wealthiest residents pay higher taxes to help get more electric vehicles on the road? It’s a question voters in the state are weighing in the election that ends Tuesday.

Proposition 30 would impose a new tax of 1.75% on income over $2 million, which is estimated at less than 43,000 taxpayers. It would bring in billions every year, most of it going to subsidize the purchase of electric vehicles and the construction of charging stations. Twenty percent of the money would go to increasing resources to fight wildfires.

The election battle comes as California races to cut emissions from transportation — by far the biggest source — and meet its ambitious climate goals. Wildfires, meanwhile, spew more carbon into the air as they grow larger and more destructive, threatening to set back the state’s progress.

Although Democratic Governor Gavin Newsom has pushed for a policy banning the sale of most new gas-powered cars in the state by 2035, he does not support Proposition 30. It pits him against the state’s Democratic Party and a number of environmental and public health organizations. organizations.

Newsom called it a taxpayer-funded giveaway for ride-sharing companies, which under California regulations must ensure nearly all trips booked through their services are zero-emissions by 2030. Lyft provided the most of the funding for the “yes” campaign; competitor Uber did not take a position.

Proponents of the measure, including most major environmental groups, say the state needs a dedicated, solid source of funding to build infrastructure that can handle more plug-in cars and help Californians of all income levels to buy them. The money will not go exclusively to passenger cars; the state could also harness it to put cleaner delivery trucks, buses and even electric bikes on the roads. Some of the money is to be used to help people in low-income or disadvantaged communities buy or access electric cars.

Parts of Southern California and the Central Valley have some of the worst air quality in the country. Cleaning pollution from cars, diesel trucks and public transit is critical to helping the state meet its climate goals and protect public health, said Eli Lipmen, executive director of Move LA, one of organizations behind the measure.

The measure provides an opportunity “to ensure that Californians who deserve the best air quality in the country actually get it,” he said.

This year, about 18% of new car sales are all-electric or hybrid cars, according to Newsom’s office. That will need to double by 2026 to meet new state mandates for car sales. Newsom has earmarked $10 billion over six years for various electric transportation programs, and the Biden administration has earmarked $5 billion over five years to build a network of highway charging stations in every state.

Ride-sharing companies like Lyft don’t own the vehicles their drivers use, but they are still required to ensure rides booked through their app will be zero-emissions. Proposition 30 does not include any provisions that exclusively benefit Lyft. But Newsom and other opponents say the measure would allow Lyft to rely on taxpayer money, not company money, to help its drivers switch to electric cars.

“Put simply, Prop 30 is a Trojan horse that puts corporate welfare above the fiscal welfare of our entire state,” Newsom says in a TV ad against the measure.

Proponents of the measure, however, say an effort to raise taxes on the wealthy to spur EV adoption was underway before Lyft got involved.

Other opponents included the California Chamber of Commerce and the California Teachers Association. Logging companies and many wealthy individuals also contributed financially to the ‘no’ campaign.

This isn’t the first time California voters have been asked to raise taxes on millionaires to pay for special programs. In 2004, they approved an election measure that raised taxes by 1% on income over $1 million to fund mental health services.


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