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Portland's Clean Energy Tax Is Direct Democracy at Its Worst

Environmentalist groups are supporting a ballot initiative that raises taxes on retailers and consumers in order to pay for grants to environmentalist groups.

Jesse Kraft/Dreamstime.comJesse Kraft/Dreamstime.comVoters in Portland, Oregon, will soon decide whether they want to raise the cost of retail purchases to pay for ill-defined clean energy grants and job training programs.

On Monday OregonLive reported that proponents of the Clean Energy Community Benefits Initiative (otherwise known as PDX 04) had gathered enough signatures to be put on the city's November ballot. If passed, the measure—backed by a coalition of minority rights and environmentalist groups including the local chapters of the NAACP, Sierra Club, Asian Pacific American Network, and Audubon Society—would impose a 1 percent tax on gross sales revenue of larger retailers.

This tax is estimated by proponents to pull in $30 million a year, which would then be spent on grants to minority rights and environmental groups to pay for clean energy programs, energy efficiency projects, urban farming initiatives, and job training for low-income and minority Portlanders and the "chronically unemployed."

A new committee, comprised in part of minority rights and environmental activists, would make recommendations on how these grants would be allocated. The mayor and city council would be encouraged, but not strictly required to accept the committee's recommendations.

Despite what might seem like some pretty parochial self-interest at play, backers of PDX 04 insist that taxing large retailers to fund groups very much like their own is necessary if Portland is to meet its ambitious environmental goals of using 100 percent renewable energy by 2035.

"To meet the city's Climate Action Plan," reads the initiative's text, "there is an urgent need to fund and accelerate greenhouse gas reductions and energy efficiencies." That such funding should come from the city's large retailers is only fair, it continues, given how these businesses both "encourage the consumption of heavily packaged and non-recyclable products" and have "have an inherent responsibility and financial capacity" to support the city's climate goals.

Despite the fingering of retailers as responsible for climate change, the PDX 04 initiative gives them remarkably little incentive to clean their act up. Its chosen method of soaking retailers—a gross receipts tax—leaves companies with the same tax burden regardless of whether they're selling plastic-wrapped coal or solar panels.

Nor do the targets of the proposal match up with its own stated environmental goals. Carbon-spewing utility companies would be exempt from the tax. Carbon-lite internet service providers and banks would not.

Indeed, the bluntness of gross receipts taxes is one of the reasons why such taxes have fallen out of favor with policymakers. Given that there is little businesses can do to avoid the tax, they will have to absorb it either by raising prices, or by passing the costs back in the form of reduced wages, hours, and benefits to employees, or via lower prices paid to vendors and suppliers.

Business groups are stressing this point in their opposition to the PDX 04 initiative.

"This new tax on sales is just going to be passed on to families in the form of higher prices on everyday essential items. We all agree that more must be done to address climate change, but making it harder to live here isn't the right answer," said a spokesperson for Keep Portland Affordable, a business-backed group set up to fight the tax initiative.

Portland Mayor Ted Wheeler has also come out against the tax proposal.

Whether these arguments will prove persuasive in November remains to be seen. Taxing big corporations to pay for a grab bag of environmental goodies is pretty dynamite politicking in a famously progressive city like Portland. PDX 04 also makes a number of politically expedient carve outs for medical service providers and most grocery store items that'll make it an easier sell to voters worried about the regressive impacts on lower income residents.

One might hope that the transparent cash grab at play in PDX 04—whereby money from retailers and consumers is siphoned off to pay for the pet projects of the initiative's backers—would be enough to turn off most voters.

Photo Credit: Jesse Kraft/Dreamstime.com

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  • Hamster of Doom||

    PDX 04 also makes a number of politically expedient carve outs for medical service providers and most grocery store items that'll make it an easier sell to voters worried about the regressive impacts on lower income residents.

    Innumeracy may be our greatest threat.

  • NoVaNick||

    A few years back, my wife wanted to do a "free" energy efficiency audit of our house. These guys did the test and figured out that there were some cracks and drafty doors we could seal ourselves, but they wanted us to use one of their recommended contractors who would charge us hundreds of dollars. We declined, however, they continued to pester us for several months and said that any work we did ourselves would not make our house compliant with current standards (whatever that meant). My guess is that this Portland tax will go into the pockets of shysters like these to fleece people into making unnecessary repairs.

  • Hamster of Doom||

    Just send us a check for $30k, and we can save you $8k over the next thirty years!

  • Cy||

    The Solar scams are RIDICULOUS. People pay a lot of money to Signal their Virtues.

  • Hamster of Doom||

    Britches is growing on me. Kind of like a second head, and yet the sassiness can be so charming.

  • Shirley Knott||

    Oregon has traditionally been a no-sales-tax state. Wouldn't this be the first* sales tax in the state? That might garner some pushback.

    *Yachats and Ashland apparently have 'targeted' taxes on the sale of meals, and lodging taxes are charged for hotels/motels.

  • chemjeff radical individualist||

    But you know, populism is good and stuff. Screw the elites! The government should serve the will of the people! Amirite?

  • Fist of Etiquette||

    The mayor and city council would be encouraged, but not strictly required to accept the committee's recommendations.

    Encouraged, eh? Financially encouraged? I would be outraged that the recommendations weren't mandatory if I thought said recommendations wouldn't be total bullshit in the first place.

  • Rhywun||

    So what actually is going to happen is the money will end up in the pockets of unionized city employees via the general treasury. Nice scam, though.

  • Agammamon||

    Its chosen method of soaking retailers—a gross receipts tax—leaves companies with the same tax burden regardless of whether they're selling plastic-wrapped coal or solar panels.

    Of course - they don't want to run into the problems other places have where the sheep change their behavior in response to the fleecing.

  • DesigNate||

    I wonder how long it will take for retailers to move out of the city limits.

  • Hendrik||

    My over under on this is 70%!in favor. Glad I left Multnomah county tax hell in 2003. Happy in Vancouver Wa

  • BYODB||


    Despite what might seem like some pretty parochial self-interest at play, backers of PDX 04 insist that taxing large retailers to fund groups very much like their own is necessary if Portland is to meet its ambitious environmental goals of using 100 percent renewable energy by 2035.


    Well, if Portland wants to use 100 percent renewable energy by 2035 the only real way to get there is to kill every last man, woman, and child in Portland since no energy source in existence is actually renewable. I guess, if I'm being charitable, they could also just kick all the humans out of Portland instead of killing them. You know, because bullets also aren't renewable. In fact, last I checked, nothing is.

  • Gilbert Martin||

    "You know, because bullets also aren't renewable. In fact, last I checked, nothing is."

    Idiocy is constantly renewable - hence this proposed tax.

  • ||

    Well, if Portland wants to use 100 percent renewable energy by 2035 the only real way to get there is to kill every last man, woman, and child in Portland since no energy source in existence is actually renewable.

    I kinda wonder "OK, *then* what's the plan?" If the Portland (or even the US) gets to 100% renewable by the end of any given year, do they put up a wall at the border with machine gun nests around Checkpoint Charlie to make sure no one burns any filthy wood, charcoal, or fossil fuel in within the perimeter? Do they selectively allow migrant workers in to build solar panels and windmills to accommodate whatever growth may take place? What about goods used within the city that were produced and even shipped to city limits using filthy carbon fuels, do they get embargoes or tariffs?

    Or do we just get to 100% renewable, check off the checkbox, and then laps back into whatever %age is more reasonable?

  • Rhywun||

    They'll be too high on the smell of their own farts to care what happens next.

  • Diane Reynolds (Paul.)||

    backed by a coalition of minority rights and environmentalist groups

    And these two things have what to do with each other?

  • Cy||

    You're not very good at connecting dots are you?

  • Rhywun||

    Expert shakedown artistry?

  • DesigNate||

    The art of the under-the-counter deal?

  • Trollificus||

    Hands out for tax dollar grants? They're dopplegangers in that regard.

  • HGW xx/7||

    Portland's Clean Energy Tax Is Direct Democracy at Its the Worst

    FTFY

    Having grown up half an hour from P-town - referencing the urine that dribbles down every exterior stairwell - what was a nice city in the early 90s has become an absolute cesspit. No wonder it's held up as the idea of progs, commies, and Bernie-bots alike!

  • HGW xx/7||

    Fuck. What's the tag forvstriketheough? It's not < del >?

  • Shirley Knott||

    < s >

  • HGW xx/7||

    Portland's Clean Energy Tax Is Direct Democracy at Its the Worst

    FTFYMyself

  • Trollificus||

    Now I'm embarrassed?

  • BillyG||

    This tax is estimated by proponents to pull in $30 million a year, which would then be spent on grants to minority rights and environmental groups to pay for clean energy programs, energy efficiency projects, urban farming initiatives, and job training for low-income and minority Portlanders and the "chronically unemployed.

    I'd like them to explain what these items have to do with switching to so-called clean energy.

  • damikesc||

    Won't those jobs cause more carbon emissions?

    And what will those new employees think when, SUDDENLY, they become the problem and not the virtuous victim?

    I'm all for it. Fuck Portland and anybody who resides there and votes there. Fuck Seattle too.

  • JonFrum||

    Very simple - if you live in Portland and you don't like it, move. If you don't live in Portland, fuck 'em.

  • Rossami||

    Regardless of the silly things they want to spend the money on, this is a poorly-structured sales tax that only applies to companies with a) national revenues over $1 billion and b) Portland revenues over $500 thousand. This tax is on top of the Portland Business License Tax (which takes 2.2% of net income).

    In other words, it's another protectionist attempt to penalize "big box" stores that completely ignores their power to build (and draw customers) right on the other side of the city limits. Predicted result: Over the course of the next few years, healthy stores will move, net tax collections (the sum of the License Tax and this new gross receipts tax) will fall, costs will rise for inner city residents without easy access to transportation, quality of life and general urban conditions will deteriorate as the failing stores left behind continue to be unable to improve or even maintain their operations and cleanliness.

  • Gilbert Martin||

    "In other words, it's another protectionist attempt to penalize "big box" stores that completely ignores their power to build (and draw customers) right on the other side of the city limits"

    And then the city will try to annex them right back into the city limits.

  • Trollificus||

    If you had occasion to drive into Portland in, say, the 80s, and again after the turn of the Millenium, you'd have seen this very dynamic in vigorous progress. Cities (and, possibly, unincorporated districts) outside of Portland were beehives of industrious development and now appear to serve a large population that presumably lives in some nearby city.

    So this is just accelerating an ongoing process.

  • Gilbert Martin||

    "This tax is estimated by proponents to pull in $30 million a year, which would then be spent on grants to minority rights and environmental groups to pay for clean energy programs, energy efficiency projects, urban farming initiatives, and job training for low-income and minority Portlanders and the "chronically unemployed."

    And also, no doubt, pay for more lobbying and agitating for even more eco-socialist wacko laws mandating or banning an ever increasing number of things.

  • Trollificus||

    At least we can be assured that the members of "minority rights groups" and "environmental activist groups" will not be members of the "chronically unemployed", right?

    (nor members of the "activist groups for the chronically unemployed", I suppose.)

  • wreckinball||

    I thought the goal was reduced CO2 emissions to fight global warming.

    Now it's a tax to subsidize "renewables" to fight climate change.

    Nice bait and switch

  • Number 2||

    And there are still those who wonder why many of us are skeptical about the "climate change" movement.

  • I am the 0.000000013%||

    Any climate change solution that isn't looking at nuclear for generation and technological measures for mitigation is about punishing something you don't like or promoting something you do and not about climate change.

    It's always about the feelz.

    'Renewable energy' may be the most stupid phrase I've ever encountered. I would love to see an exhaustive definition. Either everything is renewable or nothing is.

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