Roper: The Essex carbon tax has a bill number, is ‘monumentally complicated’

By Rob Roper

This fall, a number of climate change activists proposed a new carbon tax scheme dubbed “The Essex Plan.” (ESSEX is a near acronym for “Economy Strengthening Strategic Energy eXchange.”)

Rob Roper

Rob Roper is the president of the Ethan Allen Institute.

This latest attempt to tax gasoline, home heating oil, etc. has now officially been translated into S.284, legislation sponsored by Sens. Chris Pearson, P/D-Chittenden, and Alison Clarkson, D-Windsor.

The idea behind the Essex Plan is to use the revenue raised by the tax to subsidize electric utilities and thereby lower electric rates. While this sounds like a simple proposition, the legal language illustrates how, in practice, this will be monumentally complicated.

The plan’s creators envision not just a simple transfer of revenue, but segregating the revenues based on three categories: industrial, commercial and residential. The residential category is further complicated by designating 50 percent of the revenues for general electric rate reduction, and the other half divided between low income rebates and “rural” rebates.

The money will be collected from distributors of affected fossil fuels by the Commissioner of Taxes and deposited into a newly formed Carbon Charge Rebate Fund. The Public Utility Commission will oversee the allocation and distribution of funds to the electric utilities, who will then have to segregate the funds into three categories: residential, commercial and industrial.

Then it really gets complicated.

For example, “The Commission shall determine which areas of the State qualify as rural for the purpose of this subdivision (3)(B) and in doing so shall consider the information set forth in “Mapping Total Energy Burden in Vermont” prepared on behalf of Efficiency Vermont.”

As for the low income rebates, “In consultation with the Department for Children and Families (DCF), the Commission shall include in the method income tiers for the rebate….” And, “The manner in which are customers are notified of the availability and eligibility requirements of these rebates and how to demonstrate eligibility.” This means that the benefit is not automatic, but has to be applied for. Which, in turn, means a lot of bureaucrats processing applications — a task complicated again by the fact that people’s incomes are constantly changing.

And finally, “The Auditor of Accounts of the State may conduct audits of the activities under this chapter to ensure that all of the monies raised by the carbon charge are returned to customers. The Auditor shall conduct two such audits.”

This is just government complexity. Additionally, “Each retail electricity provider shall furnish the Commission with the information the Commission considers necessary in implementing this subchapter.” And, “The distributor shall collect the carbon charge on completion of each sale or delivery of fuel to which the charge applies. The distributor shall identify the charge collected as a separate invoice entry on each sale of fuel. … Every distributor shall maintain, for no fewer than three years, accurate records documenting all transactions to which the carbon charge applies and all transactions for which exemption is claimed. … The Commissioner may inspect these records at all reasonable times during normal business hours.”

So, in conclusion, this is going to be an expensive nightmare to comply with and enforce.

Rob Roper is president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Images courtesy of FEMA/Public domain and Rob Roper

9 thoughts on “Roper: The Essex carbon tax has a bill number, is ‘monumentally complicated’

  1. I’m all for maneuvers designed to lower energy costs, either via choices made by the consumer, or by restructured subsidies and taxes. But I agree with the other commenters here in that this scheme is non-sensical and really does nothing but shift funds around and not in a good way. Further, it would punish people like myself who have a very small electric bill (by design) and foist higher gas prices on an already thinly stretched budget. Vermont doesn’t have many transportation options other than a personal car, and wintertime travel in the mountains often requires more than a simple economy vehicle. This scheme would only hurt those people in the state who drive on a daily basis, which is the majority of its citizens.

  2. When I ran for Senate in 2016 I had a debate with the 7 candidates. Clarkson was non committal when asked about the carbon tax. As was McCormack. All 3 Republican candidates said they would oppose it as Vermonter’s can not afford another tax. Not surprising that after they are elected they change their stance and jump on another way to tax working Vermonter’s out of their hard earned money. Clarkson of course does not work and paying more will not hurt her. Maybe we should ask to see her tax returns so people know what we sent to Montpelier. Someone who does not understand what it is like to live pay check to pay check. I would be happy to show my returns, what about it Senator?

  3. How in gods name could any reasonable person think this is acceptable. This appears to be how to create I don’t know how many jobs that will eat up most of this most ridiculous tax scheme and give nothing back to any one. Let’s keep putting the burden for failed initiatives back on those who cannot afford more taxes.

  4. A redistribution scheme,robbing from Peter to pay Paul,ah but then tax scams tend to be complicated when we scheme to deceive.

  5. Bob,
    I am glad no sane politician will have anything to do with this.

    Alison Clarkson has a safe seat so she can take the risk of sponsoring this Essex plan mess.

    All this will lead to is gross intrusion by state government into the private affairs of Vermonters who will be voting out of office the legislators in support of unilateral carbon taxes

    This redistribution measure will further make less competitive the anemic, near-zero, real-growth economy

    • I guess I have to agree with Mr Post on this. Why, oh why, would anyone think that our government should get involved in this redistribution scheme?

      • Because there are so many brain washed Democrats who can’t figure out that this is thinly disguised Communism. And even if they did, they wouldn’t care.

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