Prop. 30

Tax millionaires for electric vehicle programs

What did voters decide?

This highly contentious measure failed, with about 58% of voters saying “no.”

What would it have done?

Prop. 30 would have imposed a 1.75% personal income tax increase on the top-earning Californians — for the share of their income above $2 million — per year to fund a suite of climate programs. The goal is to clean up the state’s dirty air and help meet ambitious greenhouse gas reduction targets.

The proposition would have created a new revenue stream to subsidize zero-emission vehicles and fund wildfire response and prevention — between $3.5 billion to $5 billion annually, growing over time, according to state analysts.

Most of the money — about 80% — would have gone towards rebates for people buying zero-emission cars and to build more charging stations. Half of that funding would have gone to low- and middle-income residents, who are disproportionately affected by poor air quality and heavy pollution. The state already spends millions each year on zero-emission vehicle programs and dedicated an additional $10 billion over the next five years to those programs in this year’s budget.

A quarter of the tax money would have provided funding to hire and train firefighters, who are battling increasingly worsening wildfires. On average, the state spends about $2 billion to $4 billion annually putting out wildfires. 

The tax would have gone into effect in January 2023 and would have ended by January 2043, or possibly earlier, if the state is able to slash its emissions to at least 80% below 1990 levels for three consecutive calendar years. 

Why was it on the ballot?

As part of its strategy to address climate change, California has made bold promises to cut emissions to 80% below 1990 levels by 2050 and achieve carbon neutrality by 2045. But transportation remains the largest source of the state’s planet-warming emissions, representing nearly 50% of California’s greenhouse gases. 

The state won’t be able to meet its goals if it can’t transition away from fossil fuels. Affordable and efficient electric vehicles are critical to California’s efforts to tackle climate change and clean up its polluted air. By 2035, the state plans to ban all new sales of gas-powered cars. The state will also require Lyft and Uber drivers, by 2030, to log 90% of their miles in electric vehicles. But for many low and middle-income residents, purchasing an electric car is still out of reach. Many barriers still exist that make it difficult to obtain an electric vehicle, including low vehicle supply and high costs, lack of enough charging stations and surging demand. 

At the same time, the state is increasingly facing more deadly and catastrophic wildfires, which contribute to air pollution, poor air quality and worse health outcomes for millions of residents. 

One Minute Video

Prop 30

Arguments

For

Supporters say Prop. 30 would generate much-needed funding to address the state’s two leading causes of air pollution: Gasoline-powered vehicles and wildfires. They say the money would help accelerate the transition to electric vehicles, beef up the state’s charging infrastructure and provide more resources to firefighters, who must now work year-round to fight and prevent deadly wildfires. They argue that these investments will better put the state on track to meet its ambitious climate goals. 

Supporters

  • California Democratic Party
  • Lyft
  • State Building and Construction Trades Council
  • California Environmental Voters

Against

Opponents say that Prop. 30 is an unnecessary tax hike that Californians don’t need because everyone is feeling the effects of high inflation, surging gas prices and the rising cost of living. They say Californians already pay the nation’s highest personal income tax rates, noting that the measure would raise the rate for the highest earners from 13.3% (on income above $1 million) to 15.05% (on income above $2 million) when only three other states and the District of Columbia have top rates in the double digits. They argue that the tax would drive many residents out of the state to benefit a special interest: ride-share companies. In his opposition, Gov. Gavin Newsom calls the measure a “cynical scheme” by Lyft, the largest donor to the measure, to have taxpayers help it comply with the state’s electric car mandate for rideshare companies. In addition, many opponents say Newsom’s recent $10 billion climate investment and a $97.5 billion surplus in this year’s budget, along with recent federal funds for electric car incentives, makes the state well-equipped to pay for the transition to electric vehicles and additional wildfire prevention efforts. If the state should need more money, opponents argue that it could tap into budget surplus funds to pay for these ongoing programs.

Opponents

  • California Chamber of Commerce
  • California Small Business Association
  • Howard Jarvis Taxpayers Association
  • State Treasurer Fiona Ma

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Prop 30