An editorial by Reps. Scott Beck and Janssen Willhoit
As the end of summer approaches, we are sure of two things. The leaves will soon turn and Scott Campbell is for a Vermont carbon tax. It’s a core component of his economic thinking. Anyone who disagrees with him on the Vermont carbon tax is a climate change denier and doesn’t understand the “cataclysmic” severity of carbon pollution and its effect on our planet; nothing could be further from the truth.
Energy usage, economic growth and employment are intertwined, and good energy policy can lead to decreased energy use and carbon emissions, and increased economic growth and employment. The problem with the Vermont carbon tax is it will do tremendous damage to Vermont’s economic growth and employment and will have no measurable impact on the planet’s atmospheric carbon level. It is truly a lose – draw if there ever was one.
In justifying a Vermont carbon tax, Campbell shows particular insight into his economic thinking and how he would vote on future budgets in explaining that, “We should reduce or eliminate sales tax, but we cannot simply forego the revenue.” Really? Vermont spends approximately $1,000 per capita ($620 million) more than New Hampshire. Vermont sales tax revenue is about $400 million. With prudent spending decisions and responsible budgeting, we could eliminate sales tax outright, develop revenue streams similar to the captive insurance industry that don’t impact Vermonters, and watch all of our other revenue streams grow because of the increased commercial activity created by becoming attractive to millions of consumers in adjacent New York, New Hampshire, and Massachusetts counties and southern Quebec.
Campbell notes that his experience in energy efficiency tells him that when energy prices are low people focus less on energy efficiency, and when energy prices are high vice versa. We couldn’t agree more, but is it government’s job to create linear growth? Nearly every industry goes through ups and downs; what is important is the overall growth. Who cares if the line representing efficiency gains is a bit squiggly? Linear applications are common in academia, but have little use in the real world.
St. Johnsbury and the eastern side of Vermont have suffered mightily at the hands of the sales tax since its inception in 1969. There are, however, two industries largely not negatively affected by sales tax: manufacturing and agriculture. Sales tax is not imposed on the materials used in manufacturing or products manufactured for wholesale shipment. Of course, these industries are very dependent on energy. An extra dollar per gallon of fuel when the carbon tax is fully implemented will put tremendous strain on these very large employers. To protect their modest profit margins, they will likely choose to expand and/or relocate to areas outside of Vermont with a different carbon strategy and lower energy costs. Those that remain will face pressure to automate and reduce employment and/or compensation to pay for increased energy costs. There is no victory for Vermont citizens or businesses in this arrangement.
And we haven’t even mentioned the energy costs for municipal operations, education and healthcare. Many have already made dramatic moves to reduce their carbon footprint and energy costs. How will they cover the added cost of the carbon tax? You guessed it: increased property taxes and healthcare premiums.
Vermont’s carbon tax can be summed up simply: replace a regressive tax with another regressive tax that will have the added effect of damaging manufacturing and agriculture. Government will redistribute any net carbon tax revenue to special interests, industries, and certain citizens they identify using an inefficient bureaucracy that will eat up most of the net revenue anyhow. In general, it is very similar to other policies pursued in Montpelier the last six years as taxes have increased nearly $700 million. We don’t think now is the time to double down on this failed strategy.
Just the discussion of this tax is likely causing significant damage to Vermont’s economy. On the coattails of the universal healthcare discussion that was recently torpedoed by Governor Shumlin, now some seem to have found another idea that dramatically changes nearly every businesses model. Why would any business ever come here or expand here when they have no ideas if they can survive here given the enormous change proposed by supporters of the Vermont carbon tax?
Vermont, with strong local input, should encourage energy policy that promotes alternative energy technologies and efficiencies that will continue to reduce our carbon footprint and increase jobs. That’s a win-win. We encourage you to cast your vote on Nov. 8 for candidates that stand opposed to Vermont’s carbon tax.
Reps. Scott Beck and Janssen Willhoit are Republicans who serve the St. Johnsbury House district. They are being challenged in the race by Scott Campbell, Corey Raynor and Philip Aldridge.