So Tom Steyer wants to bail out California‚??s troubled university system with a 10 percent oil extraction tax.
That‚??s interesting considering California‚??s university system may well not be troubled or in need of a bailout if not for the state‚??s pursuit of the very policies Steyer has advocated.
California ‚?? Steyer and Gov. Jerry Brown in particular ‚?? have never been able to grasp that the best thing they can do to help the environment as well as the poor and the state economy overall is to push for plentiful, affordable energy.
Instead, they have insisted on punishing the industry for providing thousands of high-paid jobs for working class Californians, billions in tax revenues and the energy to power the state‚??s 31 million vehicles and the homes, offices and shopping places of its 35 million people.
This time around, the proposal is to place a 10 percent tax on oil extraction. It is expected the tax would generate about $2 billion annually. The last attempt to enact such a tax, Proposition 87 in 2006, went down because opponents sensibly made the case the new tax would lead to higher gas prices.
With gas prices down, such proposals are reappearing. Other proposals would increase levies on tobacco and modify the state‚??s property tax limit.
And, of course, it has proven impossible to punish the oil companies without punishing those 35 million people as well. Over the 20 years ending in 2014, Californians paid 16 cents more per gallon of gas than the national average. Not only are their fuel taxes the highest in the land, but according to an L.A. Times analysis, according 10 of those 16 cents are attributable to the more expensive blend of motor fuel required only in California.
According to the The Sacramento Bee, Steyer suggested to reporters that the recent uptick in gas prices has come not from policies he has pushed but from some kind of conspiracy among the oil companies.
‚??There‚??s a huge human justice issue here about whether hardworking Californians are paying way too much for gasoline and the companies are being able to manipulate it ‚?¶ and triple their profits,‚?Ě he said with what was presumed to be a straight face.
Never mind, as the indispensable Marlo Lewis points out, that gas is still a dollar cheaper a gallon now than in May 2014, that it always goes up this time of year when the more-expensive summer blend emerges, that consumption, exports and increased demand in Europe and Asia have tightened supplies and that even the Federal Trade Commission has seen nothing to suggest market manipulation.
Steyer suggests his proposed tax would make little difference at the pump because energy is a global market. But the costs either would be passed along to consumers, which would hit the poor and various government budgets hardest, or it would be absorbed by the oil companies, which would mean less investment, fewer jobs, less tax revenue and a batch of other undesirable consequences.
Lewis compares it to the Carter-era windfall profits tax, which discouraged so much investment and cost so much to administer that it actually resulted in a loss to the U.S. government.
Today, the inverse is true throughout much of the country. Without the energy boom keeping prices down, growth in the economy would be nearly nil and oil prices, considering the geopolitical mess that is much of the oil-producing world, would be fabulously unstable.
Steyer‚??s proposal would put further pressure on the budget that funds California‚??s troubled schools. It would be borne mostly by Californians least able to afford it. And it will do nothing to address the environmental issues he says concern him most.
He probably never will get this. When you‚??re a billionaire, it‚??s just hard to see where a few extra pennies per gallon make that much difference. But let‚??s hope Californians wake up this time, look at the wreck their state government has become and figure out a way to help the situation rather than make it worse.