California: Electrocuting Taxpayers


Steve Forbes | Contributed

California is implementing a shocking new income re­distribution scheme. Even though California is one of the most highly taxed states in the country, millions of its resi­dents are in for a fresh jolt. There will soon be a sizable new charge on their electricity bills based on their income.

You read that right. Astoundingly, a big part of utility bills in the now­tarnished Golden State will be determined not only by the amount of electricity consumed but also by how much money one earns. That’s a new income tax, and it’s combined with a novel income­-redistribution plan. The legislature passed this monstrosity a year ago, and the state’s three large utilities are working with the Public Utili­ties Commission to implement it.

The “income graduated fixed charges” involve four income brackets: those who make less than $28,000; $28,000 to $69,000; $69,000 to $180,000; and $180,000 and above. Electricity rates themselves will be reduced so that lower-­income folks will end up paying less than they do now. That won’t be much solace, however. The average cost of electric power for the typical consu­mer in California is nearly 70% more than the national average.

This pernicious legislation discourages conservation, punishing higher­-income resi­dents who have conscientiously reduced their electricity consumption, say, by em­ploying solar panels and washing dishes only by hand. Their bills will go up. If they con­serve, they get penalized.

And how will electric companies know people’s incomes? If the state’s tax collection agency gets involved in that kind of data sharing, it’s guaranteed that the confidentiality of people’s incomes will be fried by hackers and dishonest util­ity employees.

All that is awful enough, but the precedent it sets is even more dreadful. Why not base the prices of all products and services on personal incomes? When you buy a pair of sun­glasses, you’ll pay for them, plus the usual sales tax—and an extra amount based on your income.

What California is doing here is nothing less than a beach­head for what the left has wanted for years: a wealth tax.

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