Who remembers CT's "Windfall Profits Tax"? Almost no one, although it's still adding to the price. And that’s typical of these state-coffer enrichment schemes
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A Washington State Home Heating bill, 2022 and 2024
In seems that, for some reason, politicians don’t want to boast of their successes in raising the price of fossil fuels for consumers, even though forced use reduction is the keystone in the battle to save the world from global warming, a goal many, even most American voters say they want to achieve. Odd, eh?
In California, where gasoline currently costs $1.50 more per gallon than the national average, the state’s new carbon regulations are going to add 65 to 85 cents per gallon, heading to $1.50 by 2035. Fantastic! Go Greens! But instead of gloating (publicly) the CARB regulators are obfuscating and denying that any such thing is going to happen; at least, not until next month’s elections.
Out in the not-so-sunny state of Washington, a “carbon sequestration” scheme has sent fuel costs sky-high, yet, again, no one wants to claim credit.
Outgoing Gov. Jay Inslee promised to "lower the price of gas" for running vehicles and heating homes, costing Washingtonians "only pennies," by instituting a carbon rationing scheme. That was a big fat lie, which he knew because his own economist predicted an at least 40 cents a gallon increase in the price of gas.
Within weeks of the first carbon auction the price of gas at the pump increased by as much as 50 cents a gallon on top of "I Did That!" Joe Biden's climate price increases. The price of everything went up dramatically because that "everything" comes by truck.
Then came the chicanery. The state economist was then forced from the government. Then, the guy who wants to replace Inslee, Attorney General Bob Ferguson, ordered energy companies to hide the carbon tax line item from consumers' bills.
Cui Bono?
(In digging around for more information on Washington’s law, I came across this enlightening bit of history on who sponsored it, and what that person is up to now: just like every other do-gooder law sponsor, from BLMers, to illegal immigration champions, to ethanol boosters, he’s cashing in):
“Reuven Carlyle, a former Democratic state senator from Seattle, sponsored the legislation, and said he was purposely vague on how the money should be spent.
“My goal politically was to get the budget writers salivating with opportunity and anticipation about how to leverage those dollars for federal dollars and for private investment,” said Carlyle.
“The new law has gotten a boost since it was signed because the federal Inflation Reduction Act included big investments in climate change that include matching federal funds, said Carlyle, who has since founded a start-up to help businesses hit climate goals.”
So, can we now please discuss this windfall tax you claim to remember?
All of which, finally, brings me around to Connecticut’s “windfall profits tax” enacted in 1980 during one of the recurrent gas shortages back then (why there were shortages is easily answered, but that’s for another time), with the promise that oil companies would be forbidden to pass the cost of that tax on to consumers. At the time, legal scholars (and even legal dolts like myself) warned that the pass-through ban would not pass constitutional muster, yet the Democrats rammed the law through, with full knowledge that a catchy phrase like “windfall profits” and a false promise that oil companies, not consumers, would have to pay “their fair share” would be hugely popular with their uninformed constituents.
The law went into effect and as predicted, the pass-through ban was struck down by the courts, and CT drivers have been paying the tax — now 26.4¢ per gallon ever since: 44 years. Connecticut gasoline retailers briefly tried to bring this tax and Connecticuts additional road use tax (spent on everything except road maintenance) of 25¢ to the attention of customers by affixing stickers to their gas pumps. The state immediately banned the practice, a ban that, like the tax itself (now renamed with the equally-duplicitous moniker of “wholesale
Here’s an interesting thing: I tried to find information on the history of Connecticut’s windfall profits tax using Google and DuckDuckGo, and the results were scattered and difficult to assemble into a coherent narrative. So I went to the free version of chatbox, and got back this summary in less than a second; I’m impressed.
Question: what is the legislative history of Connecticut's Petroleum Gross Receipts Earning Tax; include the court decision invalidating the law's initial ban on pass-through of the tax to consumers, and the state forbidding gasoline dealers from showing taxes on fuel pumps
ChatGPT said:
Connecticut's Petroleum Gross Receipts Earnings Tax has evolved significantly since its inception. Here's a summary of its legislative history, including key court rulings and amendments:
1. Initial Enactment and Tax Structure
Year of Enactment: Connecticut first enacted the Petroleum Gross Earnings Tax in 1980. The tax was imposed on the gross earnings of companies engaged in the refining or distribution of petroleum products within the state.
Purpose: It aimed to generate revenue for the state, particularly to fund transportation projects and other state infrastructure needs.
2. Ban on Pass-Through of the Tax to Consumers
The original law prohibited companies from passing the tax directly onto consumers, intending to protect consumers from bearing the burden of this tax. However, petroleum companies argued that it was impractical and inconsistent with the realities of business operations.
3. Court Decision Invalidating the Ban on Pass-Through
A Connecticut court decision eventually struck down the prohibition on passing the tax to consumers. The ruling, which stemmed from legal challenges by petroleum companies, found that the ban violated constitutional or state legal principles, such as the right of businesses to set prices based on operational costs, including taxes.
Case Example: One notable decision is Texaco Refining & Marketing, Inc. v. Commissioner of Revenue Services, where the court sided with the petroleum industry, emphasizing that while the state could impose a tax, it could not interfere with pricing strategies.
4. State Regulation Forbidding the Display of Taxes at Fuel Pumps
In response to the court's decision, Connecticut implemented further regulations that prohibited gasoline dealers from explicitly showing the Petroleum Gross Earnings Tax as a separate line item on fuel pumps or on customer receipts. The intent was to maintain transparency about pricing while avoiding direct association of the tax with the state or the fuel price consumers paid.
This regulation aimed to prevent consumer confusion [uh huh - Ed] and reduce potential backlash against the tax by making it less visible at the point of sale.
5. Subsequent Amendments and Changes
Over the years, Connecticut adjusted the tax rate multiple times in response to fluctuations in petroleum prices and state budgetary needs.
The state also refined its laws to ensure compliance with both federal and state constitutional standards, ensuring that while businesses could pass the tax on to consumers, the state maintained a degree of control over how the tax was presented to the public.
Summary
Connecticut's Petroleum Gross Earnings Tax has been a significant revenue source for the state, but its implementation has faced legal challenges and changes, particularly around its pass-through provisions and the display of taxes at gas stations. The ongoing adjustments and court rulings reflect the state's balancing act between generating revenue and managing consumer impact.
For more detailed and specific legal citations or case names, I can further explore Connecticut's case law and legislative records on this matter.
