TCI Gas Tax: Hurting Families While Accomplishing Little
One parting gift that Democrat Governor Gina Raimondo will be leaving Rhode Island as she pursues her ambition in Washington, D.C., is her decision to join the regional Transportation Climate Initiative (TCI). Basically, the project offloads some of the state’s authority over its own energy policy onto a regional government that will impose a gas tax.
The purpose is to make the use of motor fuel more expensive so people use less of it, while funneling the money that is confiscated to create the consumer pain to green-sounding slush funds in each state. Working with the Beacon Hill Institute, the RI Center for Freedom & Prosperity has released a report showing that this sort of gas tax would have a harmful effect on Rhode Island families and businesses while having a miniscule benefit to the environment, which (of course) is spread across the planet, not just to Rhode Islanders.
Using a carbon-tax bill submitted in the General Assembly in a recent session as an example, the report finds that:
The tax would also, in the first year, reduce business investment by $299 million, disposable income by $216 million, and private employment by 905 jobs. The total cost incurred by the average Rhode Island household would be $526 in 2022. As time passed and the carbon tax rose to $35, the tax would impose far more substantial economic harm. By 2026, investment would fall by $816 million, disposable income by $495 million, and private employment by 1,856 jobs. The cost imposed on the average Rhode Island household would total $1,205.
The total loss of output (measured in real GDP) due to the carbon tax would be $156 million in 2022 and rise to $420 million in 2026. The loss would be 0.3 percent of total Rhode Island real GDP in 2022 and would be 0.8 percent in 2026. This loss represents the total social cost of the carbon tax to Rhode Island. Of course, a carbon tax applied to all energy producing products would have far more severe economic consequences.
One doesn’t have to be a climate-change skeptic to wonder why our elected officials would pursue an agreement that hands over some of their authority in order to impose a significant burden on the people they represent for a small benefit to others… all just as Rhode Islanders struggle to regain their feet from the COVID lockdown that the same governor imposed through executive order.