News has recently surfaced that the Portland Bureau of Planning and Sustainability is likely to put forward a plan to tax the carbon-dioxide emissions of “large polluters” such as manufacturers located within the city limits, as well as hospitals, colleges and universities, to help fund the city’s varied climate initiatives.
While a draft plan has yet to be finalized, it is looking like the tax would be established at $25 per ton, which BPS estimates would bring in around $10 million to the city coffers in its first year.
Whatever your thoughts on the environmental merits of such a tax (which, frankly, are slim), the time to raise taxes is not during a global pandemic that has caused serious economic dislocation and has killed more than 200 residents of Multnomah County and sickened more than 13,000.
While this particular tax is aimed at businesses and not at city residents in particular, carbon dioxide taxes are generally an inherently regressive tax and disproportionally harm low-income families.
This is because those entities affected by the tax will simply pass on the costs of the tax to consumers or people who make use of its services. Naturally, these would be the Portland residents less likely to be able to afford these higher costs.
As the Congressional Budget Office noted in 2013, carbon-dioxide taxes “increase the prices of fossil fuels in direct proportion to their carbon content. Higher fuel prices, in turn, would raise production costs and ultimately drive up prices for goods and services throughout the economy. … [L]ow-income households spend a larger share of their income on goods and services whose prices would increase the most, such as electricity and transportation.”
CBO found a $28-per-ton carbon dioxide tax, just a bit higher than the one likely to be proposed by BPS, would result in energy costs being 250 percent higher for the poorest one-fifth of households than the richest one-fifth of households.
Before the COVID-19 pandemic, the poverty rate in Portland was already around 10 percent, or roughly 65,000 people, and is about 16 percent in Multnomah County. Those numbers are certain to be higher now.
Further, children, women, minorities, single mothers, trans people and people with disabilities disproportionally make up the poverty rate in Portland and across Oregon. Any increase in costs for these people could mean the difference between keeping the lights on in the house or living in darkness, between keeping the heat on or living in dangerous cold, between paying the rent or facing eviction.
Do you think this tax would be a disaster for Portland?
With cases spiking yet again, Gov. Kate Brown is ordering the closure of certain city businesses for a month, and others will have to reduce their capacity limits. Portland Public Schools are closed for in-person instruction until the end of January,