"In this world nothing can be said to be certain, except death and taxes." Originally said by Benjamin Franklin. You know what else is certain? That people in this day and age need electricity and water. If you can't clean yourself or your clothes, you'll never get a job, or hold one. If you can't cook your food, how else are you going to eat? If your power is off, then it's probably safe to say you can't afford to eat out. So why not have the government take over providing electricity and water for everyone, and charge a weekly tax out of your paycheck?
Now I realize proposing a new tax is not the most popular of ideas. You know what also isn't popular? Getting hit with a $300 or $400 electric bill because the average temperature in New York in February was 24.1 degrees, and the coldest it's been since 1934.. I'd like to point out that this does not include windchill.So of course people are using more energy to stay warm. Can you blame them? There's only so much you can do to conserve energy, but using as little light as possible won't save you $200 on your bill. But it's not just the Northern states using all that energy. The average temperature in Dallas in July of 2014 was 96 degrees. So of course those air conditioners were working pretty hard. So it's not out of the realm of possibility to think that those electric bills shot way up also. The national average electric bill in 2014 was $107.48. Divide that by four, and the weekly tax is only $26.82. So now you have no surprises coming in the mail because of a super cold, or super hot, month.
Turning the electric bill into a tax would also eliminate one major piece of assistance that gets handed out, HEAP. If everyone pays an electric tax right out of their paychecks (including unemployment) then there's no need for HEAP, because no one would get their power turned off. The money that taxpayers pay that go into programs like HEAP, can be reallocated to other areas of need. There's all kinds of complaints on social media about people getting assistance. The problem is, not everyone is scamming the system, and not everyone is able to work to get off the assistance. There's a huge gain from someone only paying $26.82 a week, as opposed to paying $142.53 a month. That extra $35 a month, $8.75 a week, means you don't have to ration out the milk, or you can provide better lunches at school, or just go one more day to payday for gas.
Ideally, however, the tax would be created so that everyone is paying what would be considered fair. The formula as to how to calculate the tax would involve the size of the residence, the total net earned the year before, and the size of the family. The family with a four bedroom home should be paying more then the person living in a studio apartment. The family that brings in $75,000 a year should be paying more then the person making $19,000 a year on minimum wage. With this formula in mind, people would still have an affordable electric bill, without any giant leaps in costs due to the weather.
No one likes paying taxes. Like Death, taxes are inevitable. So if it's something that is always going to be around, they why aren't necessities like water and electricity a tax, that can be better regulated? The power companies are just a bunch of crooks, there's no reason at all an electric company should have a net profit of of almost $4 billion dollars.
I like it when people really think about public policy, I commend you for that but here are a few points:
ReplyDeleteOne, utility companies are already quasi-governmental organizations, they are given a partnership or monopoly (depending on how you see it) on a energy market and are generally subject to a governmental board that considers requested rate hikes, so they are already heavily tied in with government.
Two, there is already some degree of a progressive rate structure, residential and commercial have different rates, there are credits for low-income users etc. (look at your bill there will be a charge for low-income assistance fund or something similar).
Three, a flat rate based on number of occupants, size of dwelling, etc. would discourage conservation and cause the cost of the program to escalate. There needs to be accountability for the amount of utilities a household uses, I shouldn't be allowed to crank my AC down to 60 degrees while you have yours set at 72 and still pay the same rate.
Four, there is a reason for a profit by a electric company, in theory a company uses the capital of its shareholders to invest in infrastructure (which is massive in the case of utilities) and in return the share price increases and/or a dividend is returned to the shareholders, without those profits the company would have a lot of difficulties in financing major infrastructure projects because who would invest in something that doesn't have a return on investment?.
Five, you are running head long into the debate of who does a better job for the consumer government or private enterprise, is the inefficiency and waste in government more or less costly to the consumer than the private companies profits. Personally I don't know the answer, but given our lack accountability standards for government agencies I tend to trust business more, now if we got more aggressive in enforcing efficiency and accountability, dare I say even draconian, then I could see making utilities public but the current cultural climate doesn't permit that.