PROP. 30: CORPORATE WELFARE WITH A DO-GOOD FACADE

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, OCTOBER 4, 2022 OR THEREAFTER

BY THOMAS D. ELIAS
     “PROP. 30: CORPORATE WELFARE WITH A DO-GOOD FACADE”

 

        A close look easily makes clear the unspoken motives behind Proposition 30, one of the less publicized and advertised initiatives on this fall’s ballot.

 

        Read it, and anyone can be sure this measure is primarily selfish corporate welfare. Starting with a new tax on the top 10 percent of the 1 percent among California’s wealthy, the proposal is in large measure the handiwork of the rideshare agency Lyft.

 

        Why does Lyft want a new income tax on anyone making more than $2 million per year, as Prop. 30 would impose?

 

        Even a quick glance at where this measure assigns its estimated $3 billion to $4.5 billion yearly take – numbers that could change considerably if many of the super-rich leave California in response – reveals the reason.

 

        Here’s where the money would go: 80 percent flows to a new state-run fund called the Clean Cars and Clean Air Trust, with most of the cash earmarked for huge numbers of new electric vehicle charging stations everywhere anyone can think of. That includes state aid for ultra-fast car chargers in single family homes, apartment and condominium buildings, as well as myriad other locations.

 

        How many chargers? The measure does not say. But it does say the purpose is to make recharging zero emission vehicles “more accessible and convenient than refueling a diesel or gasoline-powered vehicle for every Californian, regardless of where they live or work.”

 

        Clearly, whoever fuels the most electric cars will benefit the most from this shift of recharging costs for EVs from the folks who own them to the super rich.

 

        No one pays to fuel more EVs than Lyft, Uber and other ride-share companies that must in some way reimburse drivers for their fuel costs. The more state-subsidized chargers this measure can set up, the less money Lyft will need to pay its drivers and the more its profits will increase.

 

        That’s also essentially what Gov. Gavin Newsom says in TV ads for the “No on 30” campaign.

 

        At the same time, no one can predict whether an exodus of the very wealthy would follow, a la EV manufacturing tycoon Elon Musk’s move to Texas to avoid state income taxes. Nevada, Florida or other places with low or no state income levies could also be destinations.

 

        Since a big chunk of California’s budget comes from taxes paid by these same folks, there is no telling whether Prop. 30 would actually end up costing California taxpayers big money or destroying valued state programs. If 30 passes, we will all have to wait and see.

 

        Yes, the measure does toss a bone to the causes of clean air and fighting or preventing wildfires. It gives 20 percent of all the new taxes to fire prevention, giving CalFire and other existing agencies new money for pro-active programs. If this works, it could also help cut down air pollution in both fire areas and faraway places to which winds blow their smoke.

 

        But the measure proposes no tactics not in use today, and those strategies themselves are relatively unproven. Clearing undergrowth in forests is said to prevent wildfires. But that’s far from certain, especially when today’s higher winds often cause fires to spread rapidly among tree branches high above any underbrush.

 

        Plus, the 1.75 percent tax increase for the super rich in Prop. 30 may sound like a pittance, but enough such pittances have piled up that the state levy on an very high incomes here could rise above 15 percent for the first time – and that’s before anyone even mentions federal income taxes.

 

        There’s no avoiding federal taxes aside from leaving the USA, but there are plenty of places the rich can hide from state income tax, while still leaving the guts of their holdings in California intact. Just look at Musk, who moved his home and headquarters to Texas, but still makes most Teslas in a Fremont plant for whose setup he received large state tax benefits.

 

        The bottom line is that no one knows how much harm this measure might unintentionally inflict, but we do know who it benefits. Officially, it may not be called corporate welfare for ride-sharing companies, but that’s what it is.

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    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net