Election ’22: A look at California’s proposed tax hike for wealthy residents | News

Editor’s note: This story is an ongoing collaboration between the Citizen and California State University, Sacramento’s journalism program. This fall, students contributed stories on topics that affect members of the Elk Grove community. They are taught by Philip Reese, a Sacramento Bee reporter and assistant professor of journalism.

The November ballot initiative would have imposed a 1.75% personal income tax increase on Californians earning more than $2 million a year. The plans are to use the proceeds to help low- and moderate-income residents across the state purchase zero-emission vehicles.

Proposition 30 will create a tax revenue stream that subsidizes the purchase of zero-emission vehicles (ZEVs) and funds wildfire response and prevention to reduce air pollution. The proceeds would also be used to install ZEV charging stations in apartment buildings, single-family homes and public places.

Overall, this tax could generate an estimated $3.5 billion to $5 billion annually. About $2.8 billion to $4 billion of the revenue will go toward state ZEV programs to help people who disproportionately experience heavy pollution and poor air quality buy zero-emission vehicles, as well as improve electric vehicle infrastructure.

As part of the state’s plan to address climate change, California has set goals to reduce greenhouse gas emissions to 80% below 1990 levels by 2050.

Elk Grove resident Raendy Agra said he is in favor of Proposition 30.

“If you look at the bigger picture, it’s a small price to pay to make sure our state is ready to transition to zero emissions,” he said.

In 2020, Governor Gavin Newsom issued an executive order banning all sales of new gas vehicles in California by 2035 to address pollution and poor air quality. Agra, who works as a paralegal, said he likes how the proposal helps families who need more affordable transportation.

“If the government is forcing our hands to buy electric vehicles, why not raise taxes on the upper class to help people prepare for the future of transportation?” he asked. “The rest of the money will go to the lower middle class, which is always helpful.”

An additional $700 million to $1 billion raised by the proposal will be spent on addressing wildfire response and prevention. More firefighters will be hired, trained and retained, while the rest of the revenue must be spent on other preventative measures.

Elk Grove resident Kurt Dalman also supports Proposition 30.

“Fires burn every year, so if this program does responsible things with people’s money, then I’m all for it,” he said.

Nick Josefowitz, director of policy at the San Francisco Bay Area Planning and Urban Research Association (SPUR), said the measure would address concerns about the state’s power grid.

In early September, many California residents received flex alerts warning them of power outages due to a heat wave that increased electricity consumption and strained the power grid.

“Investment in (electric vehicle) charging infrastructure is associated with increasing the resilience of the grid because we’re essentially going to put a battery in every garage,” he said. “Our network will not only become more resilient. But with the widespread adoption of electric vehicles, you actually see a reduction in utility.”

Josefowitz said the transition to ZEV is necessary.

“We have to deal with climate change,” he said. “If we don’t address fossil fuel emissions and transportation, which is the largest source of emissions in California and nationally, then we will not meet climate goals.”

A number of local environmental and public interest groups, including CalFire Firefighters and the American Lung Association, support “Yes On 30” and want to improve air quality in California by fighting and preventing wildfires and reducing air pollution from vehicles.

Opponents of Proposition 30 feel the tax increase is an unnecessary increase in a time of inflation and rising gas prices. “No on 30” is a group supported by Newsom, the California Teachers Association, CalChamber and Govern For California.

Opponents say ride-sharing company Lyft is heavily funding the Proposition 30 campaign as a means of getting tax dollars to help pay for their spending. They say this is in response to the state demanding that 90% of shared vehicles be electric by 2030.

Newsom described the measure as a tax grab for Lyft. His administration has separately made a $10 billion commitment to rapid adoption of electric vehicles and cleaner air.

Jon Coupal, president of the Howard Jarvis Taxpayers Association (HJTA), also opposes Proposition 30.

“California already has the highest personal income tax in America,” he said.

Coupal said the measure is bad policy that would drive residents out of California.

“The state relies on wealthy individuals to pay roughly 40% of the state’s personal income tax revenue, and if we drive them out, that could cause a real problem,” he said.

If this proposal passes, it will go into effect in January and end in January 2043.

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