Center Publishes TCI Economic Impact Report
Negative Costs Over 100 Times More Severe than the Benefits #NoTCItax
Providence, RI – As the state struggles to recover from the crushing economic lockdowns imposed by Governor Gina Raimondo, who today is the subject of confirmation hearings for the cabinet position of U.S. Secretary of commerce, the RI Center for Freedom & Prosperity published a report detailing the significant negative economic impact on the Rhode Island economy should the state approve participation in the controversial Transportation and Climate Initiative (TCI). TCI is a proposed interstate compact, officially endorsed by Raimondo, that would artificially raise gasoline prices under the guise of reducing regional carbon emissions.
The 10-page report, The Effects of a TCI Gas Tax on Motor Fuels in Rhode Island, calculates that the total social costs of such a gas tax would be 105 times more severe than the anticipated social benefits. Under TCI in Rhode Island, global carbon emissions would be reduced by an insignificant 0.00016%. “The obvious purpose behind this TCI scheme is not environmental – it’s nothing more than a greedy money grab,” suggested the Center’s CEO, Mike Stenhouse.
The report, researched and co-published by The Beacon Hill Institute in Massachusetts using its state tax analysis modeling program (STAMP), concluded:
We find that the imposition of a carbon (or TCI) tax on motor fuels would produce a less-competitive business environment, resulting in a slower-growing economy that produces lower employment, disposable income, and investment. While the revenue generated under a carbon tax could be used to create new jobs, any new jobs would be created at the expense of the private sector.
Per the report, if TCI were implemented in 2022, within 5 years, the Ocean State would suffer:
- A per family loss of disposable income of $1205/yr ($815 million overall)
- A loss of 1856 state-based jobs
- Reduced business investment of $826 million
- A loss of state GDP of $416 million
“After all that the people of our state have been through this past year, for government now to punish people for driving their vehicles, is just flat out cruel, especially for lower-income families,” added Stenhouse. “In seeking to control and restrict the energy choices of businesses and residents, potentially leading to fuel shortages and long gas lines, these far-left unelected bureaucrats will give Americans another reason not to reside or work in Rhode Island.”
The Center’s report also listed multiple examples of failed carbon tax efforts in the U.S. and across the globe.
Earlier this month, the Center was one of 20 co-signers of an open regional coalition letter, which concluded that “at its core, TCI is a poor concept that is fundamentally regressive, economically damaging, and places an unnecessary financial burden on people who can least afford it.”
Enabling legislation for TCI is expected in Rhode Island’s 2021 legislative session. In the coming weeks, the Center expects to release a public survey poll about Rhode Islanders’ attitudes towards increased gas prices, especially when those taxes result in little, if any, environmental benefit.
More information about the proposed TCI gas tax can be found on the Center’s TCI webpage: RIFreedom.org/NoTICtax .