John McClaughry: The latest climate stealth tax

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A decade ago I wrote a column entitled "Reactionary Liberalism." That's the pernicious practice of legislators who believe government ought to fund large programs, but who dare not face the wrath of taxpayers when they're required to pay for those programs.

"Reactionary liberalism contrives to use the power of government to force third parties to shoulder the costs of its liberal agenda. Those third parties - usually private businesses - are then forced to raise their prices to cover the additional burden of supporting the mandated benefits."

"Those additional costs are thus transferred from the business to its customers or ratepayers. And the perverse beauty of this, from the reactionary liberalism standpoint, is that the victims who are paying can't figure out who to blame for having less money in their pockets."

A month from now the most audacious reactionary liberalism idea for 2020 will be unveiled. It's called the Transportation and Climate Initiative (TCI). The driving force behind it is, of course, the perceived (by some) pressing need to combat the Menace of Climate Change.

Since 2015 by a coalition led by the Vermont Public Interest Research Group (VPIRG) has tried to peddle a $500 million a year carbon tax, to make people quit burning carbon-based fuels, and at the same time generate lots of revenues for the government to hand out to needy groups, like solar farm developers, heat pump installers, and electric car dealers.

But even the present overwhelmingly liberal legislature won't buy it. So the climate change activists have hit upon another strategy.

Forty-three percent of Vermont's carbon dioxide emissions come from transportation fuels burned by cars, trucks, and motorcycles. So the activists have invented a 12-state agreement that will impose an annually escalating gasoline and on-road diesel fuel tax that every Vermont motorist, truck and bus owner will have to pay, but no legislator will ever have to vote for!

This is a reactionary liberalism dream: extract millions of dollars from people who can't figure out why their motor fuel bills are steadily creeping up, and spread the revenues around to pay for "carbon reduction investments."

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The TCI was conceived by lawyers at the Georgetown University Law Center, mainly funded by the Rockefeller Brothers Fund. This is ironic, because it was the grandfather of the five Rockefeller brothers, John D. Rockefeller, who made America's greatest fortune by producing, refining and marketing fossil fuel.

The TCI is astoundingly, one might even say diabolically, complex. The details, not yet finalized, will emerge in a draft memorandum of understanding (MOU) scheduled to appear in December. After public input, the memorandum will go to Gov. Phil Scott. His signature would put Vermont into the 12-state deal.

Then either the regulated terminals that supply motor fuel to 80 Vermont distributors, or the distributors themselves, will have to purchase "allowances," the cost of which will be inconspicuously added into the price paid by consumers.

The TCI's administrative body will decide how many allowances must be issued to sufficiently drive up the price of motor fuel, thus reducing the amount of motor fuel consumed, thus reducing to below an arbitrary TCI-set cap those awful carbon dioxide emissions that are driving the planet toward Al Gore's heat death.

Did I mention that no legislator will ever vote on this stealth carbon tax? Gov. Phil Scott, alone, can plunge Vermont into this mega-scheme to sock Vermonters with a carbon tax that the TCI backers hope they'll never figure out.

But Gov. Scott has repeatedly voiced his opposition to a carbon tax. What if he refuses to sign on to the MOU? Here's another diabolical feature. If he doesn't sign the MOU, Vermont motorists will still be forced to pay for the cost of the allowances hidden back up the supply chain in Massachusetts and New York. But Vermont would not be eligible to receive its assigned share of the net revenues (after enormous enforcement and legal costs) from the TCI allowance sales.

Here's the short takeaway. The TCI MOU is designed to make Vermont consumers pay a steadily increasing carbon tax on their gasoline and diesel fuel. No legislator will ever vote on imposing this tax. It will just happen, courtesy of the Rockefeller Brothers Fund and the climate change warriors like VPIRG who extol its benefits. After ten years of increasing motor fuel prices, the TCI will have produced no detectable effect whatever on climate change.

It will be a glorious triumph for reactionary liberalism. Just not for you.

John McClaughry is vice president of the Ethan Allen Institute.


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