California voters in both parties voted against a Lyft-backed tax hike to subsidize electric cars (EVs).
Key Details
- California voters decisively voted 59.2% against an income-tax hike on high-income earners.
- Proposition 30 would’ve added an additional 1.75% to income taxes about $2 million through the year 2043 to help subsidize EV purchases and supportive infrastructure.
- Lyft was a major supporter of the bill—spending $48 million to promote it. It would’ve helped the company more smoothly transition to EVs by lowering the price of new cars. The law also received backing from environmental groups and electric vehicle advocates.
- Governor Gavin Newsom, Netflix CEO Reed Hastings, Sequoia Capital partner Michael Moritz, and venture capitalists Michael Moritz and Ron Conway were among its critics who dismissed Lyft’s support as a “grift” and putting “the profits of a single corporation ahead of the entire state.”
- Support and criticism were bipartisan, with conservative anti-tax groups like Howard Jarvis Taxpayers Association aligning with Democratic Governor Newsom.
Why it’s Important
The law’s failure marks a major setback for rideshare companies and EV manufacturers who have less than eight years to meet the state’s mandate of using electric vehicles for 90% of miles by 2030, in support of California’s climate change initiatives.
“The defeat of Prop 30 is a big win for the governor, who seems to be tacking to the political middle as he seeks to raise his national profile, a loss for EV companies like Tesla, and a black eye for Lyft, which will have to find another way to help drivers buy EVs,” says Barron’s.
“It’s also good news for high-income Californians—residents who make $5 million a year would have paid an extra $52,500 a year in taxes had Prop 30 passed. At the level of $50 million a year, the extra tax would be $840,000,” Barron’s continues.
Lyft called the defeat a setback for the climate movement. “Climate change remains a generational issue that increasingly impacts every aspect of our lives … we remain committed to achieving our collective climate goals.”
