Oct 28, 2014 Article #265 Author: Peter S. Muffoletto, C.P.A.
The California State Assembly wants to reduce greenhouse gas emissions to 1990 levels by 2020.
AB 32 which was during the Schwarzenegger era, and is to become effective as of January 1, 2015 is the first of its kind in the U.S. to impose penalties on carbon emissions which will apply to transportation fuels, including gas and oil.
This law applies to all vehicles that run on gas or diesel fuels, which means you will be paying anywhere between 15 to 76 cents more a gallon as of January 1.
Based on input from various industry organizations and consumer groups, it is estimated that the cap and trade "tax" on carbon emissions has the potential to increase California’s retail gasoline prices anywhere from 16 cents to 76 cents per gallon.
Most expect at least a 15-cent increase beginning in 2015, with larger increases to follow as dictated by State administrators.
This tax is in addition to what California drivers already pay which is 68.1 cents per gallon, only the second highest fuel taxes in the country to New York’s 68.9 cents per gallon.
According to the California Air Resources Board (ARB) the new tax is a cost for the fuel industry, not necessarily the consumer.
Stanley Young, a board spokesperson naively or disingenuously stated that he cannot speak to how the law will affect drivers. “It’s difficult to predict how the cost of the AB 32 program will impact them.”
Young went onto state that “A carbon tax that pushes up gas prices would give all California drivers reason to be gas-thrifty.” This action was taken even after California drivers have embraced substantially reduced fuel consumption which prompted the State Board of Equalization to increase fuel taxes to compensate for the reduction in revenues from the gas taxes collected at the pump.
The central goal of the State Assembly is to “make fossil fuel more expensive in the marketplace, and reshape how Californians work, and do business.” Another spokesman for the ARB stated “that this increase in gas taxes will allow California to reshape their neighborhoods in the future where everyone will either walk to work, or take public transportation.”
To misquote Winston Churchill
“A few in government will determine how the many will live”
Don’t forget to vote next week.
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Should you have questions relating to these matters, tax, financial, and accounting issues, give us a call at (818) 346-2160.