Pat Whittinghill

Romney Is Right to Steer Clear of Carbon Tax

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Posted by Pat Whittinghill on Friday, August 16th, 2019, 11:04 AM PERMALINK

Senator Mitt Romney (R-Utah) recently made headlines when it was reported that he was considering a federal bill that imposes a carbon tax, a new nationwide tax on energy use and production in the United States. Passage of a carbon tax is a top priority of the environmental Left and has even attracted allies among corporate public relations departments at various multi-national companies.

Contrary to a favored narrative, however, there is no momentum for a carbon tax. Sen. Romney and Republicans in the House and Senate have wisely distanced themselves from these efforts and should continue to do so. 

Time and time again, voters of all stripes have rejected carbon taxes. In solidly blue Washington state, two separate carbon tax proposals in 2016 and 2018 failed to gain the necessary support for passage among voters. A Republican Congressman, Carlos Curbelo (R-Fla.), made a carbon tax a top legislative priority of his and despite significantly outperforming Donald Trump in a deeply blue district in 2016, was ousted in 2018 as a result.

Outside of the US, carbon taxation programs haven’t fared any better. Carbon taxes were the primary spark of the riots in France, resulting in the suspension of the scheduled carbon tax increase. In Canada, residents are revolting against Prime Minister Justin Trudeau’s carbon tax. In Ontario, Canada’s most populous province, voters kicked out the carbon-tax supporting ruling party.  Voters in Alberta did the same. In Australia, the longtime governing coalition of Labor and Green parties lost power after a center-right coalition promised to (and successfully did) repeal the tax. The lesson is clear: a carbon tax is toxic at the ballot box.

Carbon taxes raise the cost of utility bills, groceries, gasoline, and the costs of producing and transporting nearly every product on the market. That’s one of the reasons nearly every conservative organization in the country recently sent a letter to congress which stated unequivocally: “We oppose any carbon tax.”

The harms of a carbon tax aren’t limited to private businesses or consumers. When utility bills and gas prices go up, local governments feel the pain too. In fact, a school district in Canada wasforced to eliminate bus services for 400 public school students after facing a $3.3 million carbon tax bill. Proponents of a carbon tax have not addressed how local fire departments, school systems, and municipal governments are supposed to shoulder the burden of these costs.

In the case of the federal carbon tax bill, the so-called Energy Innovation and Carbon Dividends Act, the bill authors think they have designed a clever way to curry favor with voters, with that they call a “dividend.” Essentially, once bureaucrats in Washington get their cut of more than $1 trillion in new taxes, people are sent checks to help lessen the burden of higher prices on everything. The system for imposing the tax and the accompanying dividend is regressive, complicated, and will require a significant growth of government.

These “dividend” payments will be subject to income taxes. Households will have to deal with more paperwork for each member of the family before the annual April 15 deadline. This income tax increase caused by the carbon tax will also eat into Social Security benefits, as a much larger portion of the benefit becomes subject to taxes.

Senator Chris Coons (D-Del.) has stated that his carbon tax bill is "likely to be Democrat only,” and it is not hard to see why. Arbitrarily imposing higher costs on traditional energy sources and the products produced or transported with them will adversely impact nearly every aspect of life in America. The tax would have a disproportionate impact on low and middle income households. Taxpayers should applaud Senator Romney for steering clear of this onerous tax.


Content originally published in Townhall.


Photo Credit: Gage Skidmore

Atlanta Enacts Nighttime Electric Scooter Ban

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Posted by Pat Whittinghill on Tuesday, August 13th, 2019, 12:10 PM PERMALINK

This past week, Atlanta Mayor Keisha Lance Bottoms announced a ban on the use of electronic scooter and bike services within the city limits of Atlanta. The announcement comes on the heels of the fourth fatal incident involving scooters in the city. The ban establishes the city as a “No Ride” zone and will require providers like Lime, Bird, and Uber to make their scooters inaccessible between the hours of 9 p.m. and 4 a.m. This most recent micromobility restriction follows a previously established moratorium on the issuance of new scooter permits. The limitation on use, however, is significantly less onerous than the Mayor’s original goal of a complete ban on the services.

The Mayor’s regulatory crackdown on the city’s newest form of transportation is misguided, regressive, and irresponsible.

Electric scooters have found their niche in providing “last mile transportation,” the gap between transportation hubs and one’s home, and by filling similar gaps in the current transportation infrastructure. These distances are generally too far to conveniently walk but are short enough to dissuade the use of a car. Additionally, scooters are less expensive than other ridesharing services such as Uber cars, which also provide commuters new choices in this space. At no cost to taxpayers, these services fill in last mile gaps while also expanding the number of neighborhoods that can be reached for a broader segment of urban communities.  Electric scooters help optimize existing public transportation systems by expanding the effective range of hubs, cut down on traffic congestion, and can significantly reduce overall carbon emissions by reducing the number of cars on the road.

 The benefits of scooters as a supplement to traditional means of urban transit are especially evident when considering their impact on low-income communities. These areas are often underserved in terms of access to public transportation and individuals residing in these areas are less likely to have steady access to a car. Scooters have managed to accommodate the residents of these areas in a way that traditional public transportation has not. To this end, a number of providers have also enacted programs designed to both reduce the price of use and guarantee access in these communities.

As an example, Bird, one of the largest providers in the city, waives their unlock fee for riders who qualify for federal or state aid programs such as Medicaid. Having a steady and inexpensive means of transportation is invaluable and scooters provide this to lower income areas. This expands access to job opportunities, healthcare, and public facilities like libraries and recreation centers.  The total sum of these factors translates to higher quality of life in these communities and a partial ban on scooters minimizes the benefits they provide.

It is clear that improvements can be made to reduce risks for electric scooter riders but a partial ban like Atlanta’s is unwarranted. Efforts are better focused on enforcement and education of safety provisions along with infrastructure improvements that recognize the changing transportation system desired by residents. We urge Mayor Bottoms to reverse the ban and work with providers and the community to find positive solutions to improve rider safety without limiting consumer choices.

Photo Credit: Neil Williamson

ATR Applauds Governor Mike Dunleavy for Pushing Spending Restraint in Alaska

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Posted by Pat Whittinghill on Tuesday, August 6th, 2019, 10:14 AM PERMALINK

The Alaska budget remains in a state of flux over the Alaska Permanent Fund dividend and a number of spending cuts desired by Governor Mike Dunleavy (R-AK). Governor Dunleavy has made it clear that he intends to distribute the dividend at the level which is called for under the current law. In order to achieve this and meet the state’s legal requirement to do so, the governor has made clear that a number of budgetary cuts must be made. These cuts were made in Governor Dunleavy’s original proposal, but they have been rejected in the state legislature thus far.

This Dividend provides each Alaska resident $3,000 annually and represents their share of revenue associated with the state’s oil fund reserves. This program should not be confused with welfare or universal basic income programs which draw their funding from taxation of residents. Alaska has some of the most abundant energy resources in the United States, and funds from taxable extraction of these resources are segregated into the Permanent Fund. The primary goal of this is to ensure that money from energy extraction benefits all Alaskans, even those born after these resources run out. As such, a minimum 25% of the revenues going into the fund are reinvested for future use. The remainder becomes the annual dividend. Property and income taxes on energy companies are not included in the Fund and are instead treated as non-energy revenue. This allows for some money from energy production to be put towards funding requirements at both the local and state levels.

Despite having a payment formula written in the state’s constitution, the Permanent Fund dividends are no longer guaranteed after the Alaska Supreme Court ruled that they must compete for funding with other budgetary items. Given the size of the fund, a total of around $65 billion, eliminating the protection of these funds from being raided has made it a high priority for other state spending priorities. In fact, the dividends have not been distributed at the state-mandated level since 2016, a practice which Governor Dunleavy is attempting to buck. The Governor should be praised for his efforts to restrain state spending any ensuring that the Permanent Fund is preserved for its intended purpose.  

While most states have increased spending over the past half-decade, Alaska has actually reduced annual expenditures. This can be attributed primarily to reduced prices for oil and gas along as utilization of renewable energy sources has increased and new sources have been tapped. In 2015, the state budget sat at $12 billion as compared to last year when the total was $10.2. Why then does the state need to continue cutting? Due to the declines in energy revenue and high per capita spending, the state faces a deficit which was estimated to stand at around $2.4 billion last year. In the absence of a sudden and significant rebound of oil and gas prices or an alternate revenue source, Alaska needs to make conservative spending decisions. Governor Dunleavy has thus far been willing to make these tough choices to preserve the state’s economic wellbeing.

The Governor’s budget proposal called for $444 million dollars in government spending cuts. These cuts have met significant resistance in the state legislature. Governor Dunleavy has pushed for a gradual reduction in university spending, Medicaid spending, low priority agriculture spending, and other social spending programs. Governor Dunleavy is taking a proactive stance against overspending in general and should be lauded by taxpayers in both Alaska and in other states.

Opponents of spending cuts have gone even further than attempts to raid the Permanent Fund by calling for tax hikes on oil companies operating in the state by hundreds of millions of dollars. The state has leaned heavily on revenues raised from oil production in the past, and the global drop in oil prices has been tough on the state’s bottom line. In addition to lower prices, Alaska is now likely to face increased competition for oil development after President Trump’s executive order allowing for the exploration and development of offshore resources in previously prohibited areas across the US. Currently, Alaska’s favorable tax policies, including the absence of an income tax, and abundant resources currently incentivize investment, but squeezing oil producers for immediate gain could convince producers to look elsewhere and jeopardize future tax revenue for the state.

This past week, the Republican-led Alaska State Senate approved HB2003, a budget compromise passed along party lines by a Democrat-led House. This proposal provides a smaller dividend of $1,600 while restoring around 80% of the cuts made by Dunleavy via line-item veto. Additionally, a portion of the dividend would come from the state’s statutory budget reserves amid concerns of overdrawing the Permanent Fund. While providing for at least some portion of the dividend represents progress, the level of spending called for by this plan is simply untenable. Budget cuts are difficult, but increasing spending is not a viable strategy for a state already facing a large shortfall and reduced revenue streams. Governor Dunleavy should reject this proposal and remain committed to sustainable spending and budget reforms.  

Photo Credit: Rodger W.

Tech Freedom Podcast Talks Overregulation of Vapor Products and Why it’s a Misguided Movement

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Posted by Pat Whittinghill on Wednesday, July 31st, 2019, 3:20 PM PERMALINK

ATR’s Director of Strategic Initiatives, Paul Blair, joined the Tech Freedom Podcast to discuss electronic cigarettes and the latest developments in vaping regulation. These products are at least 95% less harmful than combustible cigarettes for adults and have enormous potential in both reducing the consequences of smoking and aiding in cessation. Despite this, there has been a significant effort to overtax and even ban these products outright in the name of public health.

[Click here to listen]

Budget Veto Gives New Hampshire Lawmakers Chance to Reconsider Tax Hike on Vapor Products

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Posted by Pat Whittinghill on Wednesday, July 10th, 2019, 3:58 PM PERMALINK

As many predicted, New Hampshire Governor Chris Sununu has vetoed the 2020-2021 state budget over the inclusion of a business franchise tax hike. As the parties go back to the negotiating table, state legislators should consider removing another harmful tax hike, namely, the inclusion of a sin tax on electronic cigarettes and vapor products. The proposed measure included in the denied budget would tax these products using a bifurcated model, ignoring the net public health benefits that vapor products provide and the economic benefits that low-tax policies have previously brought to the state.

The proposed tax would apply a 30 cent per mL rate on closed-system products, like those sold in most convenience stores, and a wholesale tax of 8% on open-system products, refillable products sold primarily in specialty vape shops.

A pair of studies completed by Public Health England (PHE) and the Royal College of Physicians (RCP), both based in the U.K., estimated that electronic cigarettes are around 95% less harmful than traditional combustible cigarettes. Additionally, a study published in the New England Journal of Medicine demonstrated that e-cigarettes are are twice as effective in aiding smoking cessation than nicotine replacement therapy (NRT) products such as patches. Even former FDA Commissioner Scott Gottlieb, who launched a regulatory crusade against vaping towards the end of his term, admitted in a statement made through the FDA, that “Novel products with different characteristics or routes of nicotine delivery have the potential to offer additional opportunities for health-concerned smokers interested in quitting.”.

Instead of punishing individuals for switching to a less harmful product or trying to quit smoking, New Hampshire lawmakers should make every effort to preserve the current financial and health incentives for adults to use these products over their traditional combustible counterparts.

Pro-growth policies such as the absence of a traditional income tax and a lack of a broad-based sales tax, have been a boon to the state of New Hampshire. As a result of responsible tax policy, New Hampshire enjoys a robust economy which ranks 7th in the US in per capita personal income, tied for 3rd in unemployment, and has the nation’s lowest poverty rate. Unfortunately, the drafted budget ignores these results and seeks to increase taxes on both consumers and businesses. The proposed vapor tax is just a piece of this, but it demonstrates a significant departure from what has made New Hampshire successful. Applying a vapor tax at such a high rate threatens local businesses which stock these products in addition to a number of New Hampshire-based companies which produce e-liquid. Adopting a tax on electronic cigarettes would make New Hampshire the fourth state in New England to do so, joining Vermont, Connecticut, and Maine. New Hampshire has long been the fiscally-responsible outlier in a region full of tax-happy states, not the progressive trendsetter. This history only makes the consideration and approval of a vapor tax more troubling.

Governor Sununu has incorrectly claimed, “It’s not a new tax, it’s a new product” and called the tax a “commonsense update.” While ATR applauds the governor for his steadfast opposition to the business franchise tax hike, his approach to this issue is misguided. Not only have these products been on the market in the United States for over a decade, but also changing the state law to tax a new product is in fact a new tax.

Now that the opportunity has presented itself, we urge the state legislature to reconsider including a tax hike on products that adults who smoke are using to quit.

Photo Credit: Mark Buckawicki

Is Texas the Next State to Follow California into a Rail-Related Boondoggle?

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Posted by Pat Whittinghill on Tuesday, May 28th, 2019, 2:19 PM PERMALINK

Despite witnessing the massive failure of the California high-speed rail project between Los Angeles and San Francisco, efforts are underway in Texas to replicate a high-speed railway between Houston and Dallas.

Although proponents claim that it will be funded privately rather than by a government entity, there are efforts underway to require taxpayers to foot the bill for what could be another massive and failed infrastructure project. The current projected cost of the line stands at 15 to 18 billion dollars, but that number could easily balloon in the same way that the California line has. This wouldn’t be disastrous but not for the possibility that if rail proponents get their way, taxpayers could be left on the hook for many of these costs.

Click here to read ATR’s op-ed in the Washington Examiner, “Texas, don’t even think about importing California’s rail disaster.”

With under 400 million dollars raised to date, through loans largely provided by a bank backed by the Japanese government, taxpayers should remain skeptical of claims that they won’t be paying for the project in some way. Additionally, an acknowledgement from Texas Central on their website that “the project will explore all forms of capital available to finance debt for the project including federal loan programs like RRIF and TIFIA” seems to echo sentiments held by a French competitor who also submitted a bid, SNCF, that a high-speed rail exclusively funded through private means is unrealistic.

These loans, specifically Railroad Rehabilitation and Improvement Financing (RRIF) loans lack taxpayer protections, according to a 2017 study of the Texas Central Rail project by the Reason Foundation. Reason concluded that “the project will inevitably have to be bailed out by the taxpayers of Texas.”

There is also lingering ambiguity over whether Texas Central even qualifies to receive federal funds under the RRIF due to the fact that it may not operate a railway under the definitions and requirements laid out in the program. Ambiguity about the definition of a railroad, which must have interoperability with other systems may disallow the Texas Central Railway from being entitled to federal eminent domain authority as well.

Being able to repay publicly-backed loans relies on two key factors: average capital cost per mile and ridership. Using the $12 billion minimum cost projected Texas Central for construction of the line, we can calculate an average capital cost of $50 million per mile. This figure greatly exceeds the costs of the only two high-speed rail lines in the world, Tokyo-Osaka and Paris-Lyon, which actually turn a profit. The projections for ridership of 5 million passengers by 2029 and 13 million by 2050 provided by Texas Central are much lower than the current ridership of the aforementioned lines. Once again, these are the figures provided by Texas Central, not yet subjected to serious public scrutiny. For some context, estimates for the California project were borderline fraudulent. 

From a taxpayer-investment perspective, there is reason to doubt a real need for high-speed rail in the Dallas to Houston corridor. This area has high rates of car ownership, small transit systems and percentage of transit usage, along with low population density when compared to other major U.S. regions. This could spell trouble for a project which will require a high level of adoption to be successful. As for a desire for such a project, Texans should look how desire to continue construction on the high-speed rail in California has dwindled with estimated costs climb. It was actually the Democrat Governor of California who essentially gave up on the project, even before the Trump administration began to claw back some of the money allocated for it under the previous administration.

Should this project move forward, taxpayers must be protected against risky loans and loan guarantees and at a minimum, federal regulators should refuse to back the project without additional verifiable data on ridership projections. Even if this project can be entirely privately financed, there remain significant concerns about the use of eminent domain for the construction of the line and its stations.

These projects often turn into boondoggles. To avoid such a disaster, it might be best to just kill the Texas Central Rail project before it ever leaves the station.

Photo Credit: Sergio Ruiz