PORT ANGELES — A comic with a Ph.D. brought his anti-pollution message Monday to 48 members of the business community while carrying a carrot: the effective elimination of the state’s business-and-occupation tax for manufacturers.
Yoran Bauman’s stick: Charge manufacturing companies $25 a ton on fossil fuels that add carbon dioxide to the atmosphere and cause climate change, a hike that could increase gas prices by 25 cents a gallon.
Bauman, who billed himself as “the first and only stand-up economist,” presented his argument for what has been termed a revenue-neutral carbon tax and a 1 percent statewide sales tax reduction at a Port Angeles Regional Chamber of Commerce luncheon.
“Temperatures are going up pretty much in line with the projections of climate scientists,” Bauman said in arguing for the proposed Initiative 732.
“The way to get less pollution is to make polluting more expensive.”
Sporting a Coca-Cola-themed T-shirt made in China and emblazoned with “Enjoy Capitalism,” the 6-foot-5 University of Washington professor told attendees he’s a supply-side economist.
“I stand up and let the jokes trickle down,” quipped Bauman, whose presentation was sponsored by Olympic Climate Action.
Gathering signatures
Bauman said the group Carbon Washington has more than 100,000 of the 315,000 signatures the campaign wants for I-732 by the end of the year.
Organizers are hoping the state Legislature passes the proposal in 2016 and, if that doesn’t happen, voters approve it in the Nov. 8, 2016, general election.
The goal: give companies an incentive to reduce usage of fossil fuels and consumers an incentive to reduce usage of gasoline.
Under the plan, the B&O tax would be reduced from 0.44 percent of gross receipts to 0.001 percent for manufacturing companies, saving the businesses about $200 million annually.
Those same businesses would spend about $200 million more for the carbon tax, with the greatest impact on businesses using mostly coal, followed by those using natural gas.
“Clallam and Jefferson [public utility districts] use very clean power,” Bauman said.
Revenue-neutral
As an example of its revenue-neutral nature, Bauman said the plan would cost seven Eastern Washington food processing plants that rely on natural gas $7 million in carbon taxes but save them $7 million in B&O taxes.
“The overall tax bill is not going to go up, but you have this strong incentive to reduce emissions,” Bauman said.
The state’s part of the sales tax also would be reduced from 6.5 percent to 5.5 percent, saving taxpayers $1.3 billion annually.
In addition, 400,000 low-income households would receive a tax credit of up to $1,500 a year at a cost of $200 million.
The total value of the tax swaps is about $1.7 billion annually.
“What a tax reduction does is it provides a broad benefit to households and businesses across the state,” he said.
Household savings
Households would end up saving about $180 to $200 a month in sales taxes and would pay about the same amount extra for higher gasoline and other fossil fuel consumption, such as home heating and, in some cases, electricity, Bauman estimated.
“Economists across the political spectrum believe this is a pretty good idea,” he said.
A similar plan in British Columbia that’s been in place since 2008 is a case in point, Bauman said.
It has reduced carbon emissions compared to the rest of Canada and has garnered support from both major parties.
“The carbon tax has reduced the drag of the tax system policy of the right-of-center government,” he added.
The plan has been opposed by environmental groups that want a tougher regulatory approach and by others who are skeptical and cynical about government, Bauman said.
“Our policy is a risk, but climate change is a risk,” he said.
“We think it’s a risk worth taking.”
For more information on Carbon Washington, visit www.carbonwa.org.
________
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at pgottlieb@peninsuladailynews.com.
