Newsom Opposes a Wealth Tax to Pay for Electric Vehicle Mandate

Governor Gavin Newsom has taken a strong stance against a Lyft-backed EV initiative on the November ballot that would tax the rich

A new initiative to subsidize California’s electric vehicle market, named Prop 30 on the November ballot, seems at first glance to be just the kind of thing that Governor Gavin Newsom, who touts himself as a climate leader, would be all about. 

In fact, the initiative would help achieve the goal set out by the Governor’s 2020 executive order mandating all new passenger cars sold in the state to be zero-emission vehicles by 2035.

But, surprisingly, Newsom is the initiative’s biggest opponent, Politico reports. The Governor has labeled the initiative a “cynical scheme” by the ride-share company Lyft, which has already spent $15 million to get Prop 30 passed. 

So when did Lyft get so environmentally-conscious? As part of California’s climate initiative set forth by Newsom’s 2020 electric vehicle mandate, an adjacent and widely unnoticed law compels ride-sharing companies like Lyft and Uber to almost completely purge their fleets of gas-powered cars by 2030. 

The Governor’s main concern with the new initiative is its proposed wealth tax to fund the transition of gas-powered cars to electric vehicles in the state. Newsom sees Lyft’s push for Prop 30 as a thinly veiled attempt to meet the requirements of the EV mandate with taxpayer money. 

According to Politico, Prop 30 would raise income taxes on people earning more than $2 million a year to fund zero-emission vehicle purchases and infrastructure. Half the money for incentives would go to people in lower-income communities and a share of the money for infrastructure would be used to install charging stations at apartment buildings.

Some of the funds would also be allocated to supporting wildfire prevention efforts, and has won the initiative backing from firefighters. 

Passing such a tax, even in deep blue California, would be no mean feat and take a massive political push—and, of course, it would tick-off some of Newsom’s key donors and supporters. 

The conservative-leaning California Chamber of Commerce has backed Newsom’s position, claiming that an income tax would be bad for the state overall, citing concerns of rampant inflation and a looming recession. 

On the other hand, environmentalists who are pushing for the new tax have called out the Governor, claiming that his position is being influenced by his alignment with right-of-center donors and business groups.

Many environmentalists who had previously supported Newsom’s progressive climate agenda are outraged at the Governor’s stance

 “I’m pretty disgusted,” said Mary Creasman, CEO of California Environmental Voters told Politico. “It is astounding to say the least from a governor who says he’s progressive.”

Newsom has responded to critics like Creasman, claiming that his position has nothing to do with lobbying efforts from so-called “billionaire donors.” 

The Governor has maintained his stance in a statement, asserting that “Prop. 30 is fiscally irresponsible and puts the profits of a single corporation ahead of the welfare of the entire state.” 

Newsom also pointed out that California is already allocating $6.1 billion of its budget surplus to electrical vehicle manufacturing and infrastructure over the next five years. The state has also given about 450,000 rebates to people who purchased low-emission vehicles. 

Still, environmentalists believe that the Golden State is going to have to do more to stay ahead of the climate crisis and complete its transition to electric vehicles. For one, the number of charging stations would have to dramatically increase in order to support a full transition to EV. Of the 79,000 stations currently in the state, most are privately owned. 

“It’s unclear to us where, as automakers, that volume of charging infrastructure is going to come from if there’s not state investment,” Curt Augustine, senior director of state affairs for the Alliance for Automotive Innovation, an industry group that has remained neutral on the ballot initiative, told Politico. “With this state mandate we’re going to need all the help we can get.”

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