Washington State Imitates California

Congratulations, of the dubious sort, to Washington state. The folks in Olympia have dethroned California to claim the distinction of the country’s highest gasoline prices. Credit goes to their cap-and-trade program and “clean fuel standard,” both of which took effect this year. California pioneered these policies more than a decade ago, and Washington wants to catch up.

Both programs require fuel suppliers to reduce CO2 emissions or buy credits from other more “sustainable” businesses such as owners of electric-vehicle charging stations. Refiners can also buy cap-and-trade credits at state auctions with the proceeds funding green subsidies. These policies add about 40 to 50 cents to the price of each gallon of gas in California.

That isn’t enough for the climate lobby, and Washington state regulators have heeded green complaints and made it even tougher for fuel suppliers by raising the costs of compliance. Washington Policy Center’s Todd Myers estimates that cap-and-trade adds 45 cents a gallon to price of gas—about twice as much as California’s program.

Gas prices in Washington have shot up $1.18 since the start of the year—Florida’s have remained flat—and are now averaging $4.97 a gallon compared to a national average of $3.49. The climate policies are intended to punish fossil-fuel consumption, but they punish lower- and middle-income folks who spend more of their income on fuel.

That’s not enough punishment for the Seattle City Council, which now wants to impose a new 2% capital gains tax. Washington long maintained no income tax, which made it more attractive to businesses and high earners. But two years ago Democrats in Olympia imposed a 7% tax on capital gains over $250,000.

The Washington Supreme Court this spring used legal legerdemain to uphold the tax despite a 1933 precedent that prohibits a progressive income tax. Seattle progressives want to exploit this tax loophole. “People are eager for a fair and reasonable tax system because we currently suffer from the most regressive taxes in the nation,” City Councilman Alex Pedersen said. Tell that to drivers.

Washington’s gas tax at 49.4 cents a gallon is the country’s third highest after Pennsylvania and California. Evergreen State residents who have fled California’s high taxes are discovering they may have to move again.