California rolls out income based electric bills

[supton]

Trying to not go too far off topic, it's actually still incredible to me that there are people that consider progressive tax rates unfair.

Define fair. If I half my income, or double my income, do I benefit any differently from what Washington does for me?

Why does my town tax me on the value of my property? if my property is higher value, does it cost more to plow the snow in front of my house than if it was lower value? cost more to run police/fire/EMS in case of an emergency?

I’ve yet to figure out what is a “fair” way to tax anything. Just that things have to be paid for. Usage tax makes the most sense, but it’s kinda hard to come up with a usage tax (rate or flat fee) for police/fire/EMS that I don’t call on a regular basis, much less my fair share for anything at a federal level.

 

[dnewton3]

As typical, the news reporting is probably leaving something out ...

"SCE says approximately 1.2 million of its lower-income customers will see their bills drop by 16%-21%.
Overall, rates will decrease by about 33% per kilowatt hour for all residential customers."

I don't understand how higher-income people can pay a higher flat-rate, but then save money in the overall pricing structure. Plus, if you read the two sentences above, it would imply that the "overall" (average?) savings will be 1/3 lower bills. How's that going to happen? Have they been so horribly grossly overcharging everyone that there's fat left to trim before getting to the bone?


And the Pandora's box to discuss in the background is how the power company is going to know your household income??? Are they going to get into your State tax filings?

This just reeks of stupidity and invasion on about every level.

 

[PimTac]

 

[brianl703]

They already have food and rent assistance. So you're saying isn't successful at running a program? Shocking. This will be the same.

The handful of "poor" people that I've known have *terrible* money management skills. As in "let's use the inheritance to buy a brand new car instead of getting a place to live where I'm not having to sponge off someone" terrible.

 

[K.Aoi]

Define fair. If I half my income, or double my income, do I benefit any differently from what Washington does for me?

Why does my town tax me on the value of my property? if my property is higher value, does it cost more to plow the snow in front of my house than if it was lower value? cost more to run police/fire/EMS in case of an emergency?

I’ve yet to figure out what is a “fair” way to tax anything. Just that things have to be paid for. Usage tax makes the most sense, but it’s kinda hard to come up with a usage tax (rate or flat fee) for police/fire/EMS that I don’t call on a regular basis, much less my fair share for anything at a federal level.

The fairness comes from people who make more money are less impacted by paying more in taxes than those who don't. 35% of a person making $28k/year's income will impact them far more than 35% of a person making $100k a year, will impact them more than a person making $500k/year and so on. That's why flat taxes are regressive. They by design hurt lower income people more. Sales tax is another example of a regressive tax, by the way. Unfortunately we now live in a society where "I got mine, screw everyone else" is the default way of thinking for a lot of people.

 

[K.Aoi]

The handful of "poor" people that I've known have *terrible* money management skills. As in "let's use the inheritance to buy a brand new car instead of getting a place to live where I'm not having to sponge off someone" terrible.

Anecdotes are not data.

 

[dogememe]

As typical, the news reporting is probably leaving something out ...

"SCE says approximately 1.2 million of its lower-income customers will see their bills drop by 16%-21%.
Overall, rates will decrease by about 33% per kilowatt hour for all residential customers."

I don't understand how higher-income people can pay a higher flat-rate, but then save money in the overall pricing structure. Plus, if you read the two sentences above, it would imply that the "overall" (average?) savings will be 1/3 lower bills. How's that going to happen? Have they been so horribly grossly overcharging everyone that there's fat left to trim before getting to the bone?


And the Pandora's box to discuss in the background is how the power company is going to know your household income??? Are they going to get into your State tax filings?

This just reeks of stupidity and invasion on about every level.

That’s really the biggest thing. How to determine household income. For example, where I live I rent a room in cash for a fixed price and don’t pay the utilities. Sure I get mail there and my car is registered there etc. but except for my annual taxes how are they going to actually determine an accurate household income?

Better thing would be just cut the **** rates which can only happen if they make power cheaper. And the best way to do that would be using nuclear power. But that’s never going to happen around here.

 

[brianl703]

Anecdotes are not data.

I realize that.

My observations have been shared by others, however.

 

[K.Aoi]

I realize that.

My observations have been shared by others, however.

Well there's certainly a lot more to it that is out of scope of this thread. But it's absolutely a mistake to sneer at people who are poor and blame them for being poor.

 

[Kruse]

Let’s expand on this a little bit…
If it’s good for electricity, it should be good for any other necessity, right? The cost of groceries would depend on your income, the price of a gallon of gas would vary, your bill at WalMart would be adjusted, again, by income.
You’re in line at McDonalds and the guy in front of you pays $10.00 for a #5 combo. You then order the same #5 combo and it costs you $15.00.
Everyone is fine with that?

 

[brianl703]

Well there's certainly a lot more to it that is out of scope of this thread. But it's absolutely a mistake to sneer at people who are poor and blame them for being poor.

I can't blame someone for having cognitive challenges which aren't their fault. However, handing them $750 a month and expecting them to spend it wisely doesn't work.

 

[K.Aoi]

Let’s expand on this a little bit…
If it’s good for electricity, it should be good for any other necessity, right? The cost of groceries would depend on your income, the price of a gallon of gas would vary, your bill at WalMart would be adjusted, again, by income.
You’re in line at McDonalds and the guy in front of you pays $10.00 for a #5 combo. You then order the same #5 combo and it costs you $15.00.
Everyone is fine with that?

I would be personally but I understand on this site that I'm the outlier. Personally for example I'd be fine paying more taxes if it meant that I didn't pay a health insurance middleman scam company a premium they'll use to reward shareholders if it meant that everyone could get access to healthcare without probably going bankrupt in the process. Of course I'm not saying anyone should go to walmart and pay $100 for what someone else pays $10 for, but a sliding scale would be ideal. Of course, that would be a massive data privacy nightmare so isn't feasible. But it's just an example of the wider idea of "if you make more you should pay more for the benefit of society as a whole". And for the record, WIC and SNAP is in fact a thing that exists which already performs some of that. Now, the problem with SNAP is that it can be used to purchase incredibly unhealthy food items so people buy that stuff rather than high quality, fresh, healthier food.

The US is extremely individualistic in general, where "love thy neighbor" no longer means anything. In contrast to other societies that are more collectivist and typically do more to care for everyone.

 

[Warlord]

California abandoned reality long ago.

 

[dkryan]

Let’s expand on this a little bit…
If it’s good for electricity, it should be good for any other necessity, right? The cost of groceries would depend on your income, the price of a gallon of gas would vary, your bill at WalMart would be adjusted, again, by income.
You’re in line at McDonalds and the guy in front of you pays $10.00 for a #5 combo. You then order the same #5 combo and it costs you $15.00.
Everyone is fine with that?

Yep, I would be!

But only if I were desperate enough to eat at McDonald’s. And I was THAT guy in front of you……..!

 

[JeffKeryk]

That is just base rate, for being connected to the line, and not including delivery per kWhr let alone kWhr usage, right?


I don’t want to defend this scheme, but to me it sounds kinda like the progressive tax rate we pay to Washington—all of us seem to benefit equally from national defense etc, yet what we have to pay is taxed at progressive rates. I don’t know if any states use a progressive state income tax? but unless if CA does, then this is just going down a bad road.

If CA wanted to make things cheaper for people, then just raise their income tax rate and offer to pay the base connection fee to the power company. Still not fair to high income earners but basically matching how it works for everything else.

That's exactly what it is; a progressive rate.

 

[JeffKeryk]

As typical, the news reporting is probably leaving something out ...

"SCE says approximately 1.2 million of its lower-income customers will see their bills drop by 16%-21%.
Overall, rates will decrease by about 33% per kilowatt hour for all residential customers."

I don't understand how higher-income people can pay a higher flat-rate, but then save money in the overall pricing structure. Plus, if you read the two sentences above, it would imply that the "overall" (average?) savings will be 1/3 lower bills. How's that going to happen? Have they been so horribly grossly overcharging everyone that there's fat left to trim before getting to the bone?


And the Pandora's box to discuss in the background is how the power company is going to know your household income??? Are they going to get into your State tax filings?

This just reeks of stupidity and invasion on about every level.

Higher income earners will pay more; they will not be saving money.

The income level thing was the 1st thing I thought of.
I doubt this will ever pass, but I have been wrong before!

 

[supton]

The fairness comes from people who make more money are less impacted by paying more in taxes than those who don't. 35% of a person making $28k/year's income will impact them far more than 35% of a person making $100k a year, will impact them more than a person making $500k/year and so on. That's why flat taxes are regressive. They by design hurt lower income people more. Sales tax is another example of a regressive tax, by the way. Unfortunately we now live in a society where "I got mine, screw everyone else" is the default way of thinking for a lot of people.

I find that hard to believe...

I did a quick look on this, and would have to read more, in order to have an opinion about regressive, proportional (which I don't understand) and progressive taxes, the opinions about them in this vein of good/bad for the poor. I see I'm not going to come to an opinion in the next 5 minutes (too much reading to do, so as to create an informed opinion), so I'll leave it here.

*

Question: how does this work with the power company? Do you have to send them last year's W2 or do they just take you at your word that you're low income and trustworthy? Can one just pay the max rate if they don't want to divulge their income?

 

[edyvw]

Here people read the title and immediately jumped: aha, California is, as usual, going down the drain (mind you, we are talking about 4th largest economy in the world).
It is the proposal by three electric companies. This is a typical oligopoly. They got together and figured out how to preempt clamp by the government. They understand that this situation is not going to be manageable, but they want still lot of leeway and profits. So, let's roll out something that will buy us time and corner state government. It might have some benefits to consumers, and it has to, so we can show SOME benefits. But the real reason is maintaining an oligopoly between these three companies.

 

[PimTac]

The US is extremely individualistic in general, where "love thy neighbor" no longer means anything. In contrast to other societies that are more collectivist and typically do more to care for everyone.

The first pilgrims tried the collectivist route for the first couple of years and it failed because the hard productive workers subsidized the ones that were lazy. Then they changed to the individual way.

 

[bullwinkle]

On what planet does a POWER COMPANY, NOT a government entity, get the right to everyone’s income level?? This is basically a (semi-) regulated utility, would the government be passing out this information? Cannot be legal, even in the “People’s Republik of California”!