California Governor Gavin Newsom discusses Proposition 30, a tax measure for wealthy residents. Newsom opposes the measure that has divided Democrats. (Getty images)
SACRAMENTO, California – Should California’s richest residents pay higher taxes to get more electric vehicles on the road? That’s a question that state voters are weighing in the election that closes on Tuesday.
Proposition 30 would place a new tax of 1.75% on incomes above $2 million, which is estimated to be less than 43,000 taxpayers. It would bring in billions annually, most of which will subsidize the purchase of electric vehicles and the construction of charging stations. Twenty percent of the money would go to boost resources to fight forest fires.
The ballot comes as California seeks to reduce emissions from transportation — by far the largest source — and meet its ambitious climate goals. Meanwhile, wildfires spew more carbon into the air as they grow larger and more destructive, threatening to slow the state’s progress.
Although Democratic Governor Gavin Newsom pushed for a policy that would ban the sale of most new gas-powered cars in the state by 2035, he does not support Proposition 30. organizations.
Newsom calls it a taxpayer-funded giveaway for rideshare companies, which, under California regulations, must ensure that nearly all trips booked through their services are zero-emissions by 2030. Lyft provided most of the funding for the ‘yes’ campaign; competitor Uber has not taken a position.
Proponents of the measure, including most major environmental groups, say the state needs a dedicated, robust source of funding to build infrastructure that can handle more plug-in cars and help Californians of all income levels buy them. The money does not go exclusively to passenger cars; the state could also tap into it to put cleaner vans, buses and even e-bikes on the road. Part of the money should go to help people in low-income or disadvantaged communities buy or use electric cars.
Parts of Southern California and the Central Valley have the worst air quality in the country. Cleaning up pollution from cars, diesel trucks and public transportation is essential to help the state meet its climate goals and protect public health, said Eli Lipmen, executive director of Move LA, one of the 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.
According to Newsom’s office, about 18% of new car sales this year were for all-electric or hybrid vehicles. That will have to double by 2026 to meet new state auto sales mandates. Newsom has committed $10 billion over six years to 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.
Rideshare companies like Lyft don’t own the vehicles their drivers use, but they’re still working to ensure that trips booked through their app are zero-emissions. Proposition 30 does not contain any provisions for the sole benefit of Lyft. But Newsom and other opponents say the move would allow Lyft to rely on taxpayers’ money, not company money, to help its drivers switch to electric cars.
“Put simply, Prop 30 is a Trojan horse that puts the well-being of corporations over the fiscal well-being of our entire state,” Newsom said in a television ad against the measure.
Supporters of the measure, however, say there was an effort to raise taxes on the wealthy to boost electric vehicle adoption before Lyft got involved.
Other opponents included the California Chamber of Commerce and the California Teachers Association. Logging companies and numerous high net worth individuals also contributed money to the “no” campaign.
It’s not the first time California voters have been asked to raise taxes on millionaires to pay for special programs. In 2004, they passed a ballot measure that raised taxes by 1% on incomes over $1 million to fund mental health services.
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