California, France and a Gas Tax Hike
In California, voters recently rejected an effort to reduce the 12-cent a gallon gas tax increase backed by the legislature and Gov. Jerry Brown. In France, rioting and protests accompanied a proposed 25-cent per gallon gas tax increase. Why the different reactions?
Trying to discern an answer is important because some argue that the situation in France is a harbinger of things to come here in this country, if not the violent protests, at least pushback against higher taxes to battle climate change. French authorities suspended the tax following days of civil unrest.
Measuring the reactions in the two jurisdictions is apt because California ranks as the fifth-largest economy in the world, while France is the sixth-largest when only nation-states are considered, this despite California’s population of about 40 million is less than two-thirds of France’s 67 million.
While France raised the gas tax to attack climate change, the campaign against California’s gas tax repeal was focused on repairing roads. California has its own programs to combat climate change, of course, but the major effort around California’s climate change prevention efforts and revenue increases have centered on the state’s cap-and-trade program.
In France, gasoline costs about $7 a gallon. In California the cost currently is less than $4. The French protestors were closer to a breaking point over gasoline prices. Before the recent election, I had suggested that the cost of gasoline might be the prime weapon the pro-gas tax repeal forces might have when the vote was taken but the cost of a gallon of gasoline was steady or dropping around election time.
However, there are similarities with the French protest and the California voters who opposed the gas tax increase. The French protestors are mainly middle-class and rural residents (known as Yellow Vests for that’s what they wear in protesting) who must drive far distances to get to jobs and have suffered with recent economic downturns. The main vote to support the gas tax repeal measure, Proposition 6, came from more rural California, where workers also drive longer distances to work and have suffered to a greater degree during economic upheavals. Majorities in 30 of California’s 58 counties, mostly inland, voted for the repeal.
Despite California voters taking a different stand on a gas tax increase, a number of commentators and political advocates argue that the French gas tax revolt could be mirrored in the United States if similar moves to raise the tax and sharply increase the cost of gasoline to promote the battle on climate change happen here.
One such argument was made in Forbes by former California assemblyman Chuck Devore, now Vice President of National Initiatives at the Texas Public Policy Foundation.
DeVore wrote, “The violent protests in France were fueled by intense frustration felt by a middle class that sees itself squeezed. They don’t earn enough to be part of the elite unconcerned with fuel taxes…”
He argued that America should see the French resistance as a warning, that some programs proposed by incoming Democratic Congress members pushing a green agenda that raises costs through dramatic increases in a gas tax or levying a carbon tax will put pressure on Americans to resist such actions.
It’s important to note that the Yellow Vest protests started over the gas tax but the complaints of the protestors are broader dealing with the cost of living. In addition, not all members of the Yellow Vests are in sync on the goals, which have expanded to embrace other issues like raising the minimum wage, re-establishing a wealth tax, and even reducing the use of plastic products.
The California election result is an indicator that dissatisfaction with a gas tax increase may not be universal, at least given this state’s particular circumstances. The distinctions between the France and California situations must be considered, including, of course, the overall price of gasoline and the economies.
A question arising from the protests is whether raising the cost of energy will be an effective tool in a war on climate change. Some believe the French reaction will forestall efforts to use some form of carbon tax as a tool. However, even some prominent Republicans in this country argue that a carbon tax should be pursued.
Former United States cabinet secretaries George Schultz and James Baker have proposed a carbon tax system in which refineries, ports and mines along with other industries would pay a carbon tax with the funds paid out as dividends to the American people. An organization headed by former Republican senate leader Trent Lott is pushing for legislation to support the idea.
The France and California responses to recent gas tax increases are different markers in what promises to be a difficult and long term battle to deal with climate issues without reducing economic quality of life.