This seems so obvious, but I am curious why someone thinks this is a good idea? My only guess is the people driving this change don't have the power to do it 'right' so this is the closest they can do?
Rent control is a great example. It decreases housing supply, so it increases returns on investment for real estate in California, and increases homelessness. However, the politicians get to claim it does the opposite of those things because basic macroeconomics are too nuanced for campaign slogans.
https://www.theatlantic.com/ideas/archive/2021/03/signature-...
Developers building non-rental housing don't care about rent control. In fact, they benefit from rents being high, and from there being a housing shortage, as it makes non-rental housing more financially attractive.
Developers building rental housing shouldn't care much about it, either, as their financing is dependent on what they are going to rent the units out for, not what some grandma who lived in her apartment for 30 years is paying. Grandma's not part of the tenant market for new units, L5 SWEs making 400k/year are.
Rent control isn't the reason you can't build.
Can you explain why builders are paying rent control tenants to leave [0]? And where does the payoff money come from? Future rent? Future home buyers?
[0] - https://www.nytimes.com/2015/12/25/nyregion/new-york-builder...
It's not the first, second, or even fifth reason for the supply-side shortage. The costs are passed on to the buyers/renters, and despite that, demand continues to massively exceed supply.
As you said, eliminating rent control would lower prices by 2% on average (saving future residents millions) and helps projects be built faster (by removing red tape).
But everyone throws their arms up, because the tenant can't afford market rent. A battle in court proceeds and the tenant ends up receiving a $100k buyout to leave.
Based on this relatively common situation, rent control prevents more housing from being built and causes prices to increase (the $100k buyout needs to come from somewhere).
[0] - https://www.nytimes.com/2015/12/25/nyregion/new-york-builder...
The underhanded "rent would be lower so everyone would pay less" is fundamentally flawed. Certainly you can argue some people pay more due to rent control but we cannot pay more on average unless you decide to ignore that getting rid of rent control would also increase demand while increasing supply.
The point is to deal better with the economics of established widespread distributed generation and to avoid disencentives to displacing existing residential gas use with electricity, and to similarly improve the incentive structure of home-charged BEVs vs. gasoline vehicles. Doing that takes splitting payment for generation (per kW) from connectivity (fixed) rather than inflating per kW costs to capture the average costs of connectivity.
After all, a lot of the costs aren't in generation but delivery.
CPUC can change utility fees statewide, but any statewide tax change would take legislation, and if it includes an increase of any kind, anywhere, would take a supermajority in both houses of the legislature, and changing that would take a Constitutional amendment.
Government can create incentives for the people through taxes, but the people create incentives for government through Constitutional structures.
Of course, once CPUC has the proposed set up, and before it goes into effect, nothing stops the legislature (which is above CPUC), if it can find the votes, from eliminating the income gradated fixed fee portion of the rate, funding utilities the average cost of that out of state funds for all hookups, and adopting appropriate additional taxes to cover it (or any of a variety of other ways of moving the income gradation into the tax system), and while that would be a better way to do things, its better to do it the way proposed than not at all, which is the more likely result of relying on a legislative supermajority.
The US is a highly progressive taxation country. By comparison, Scandinavian countries are far less progressive on taxation, the burden is spread wider, you're made to pay for eg your healthcare costs in said countries via high taxation. Also compare the typically modest US sales tax levels vs the high VAT taxes across Europe and elsewhere.
Here are the facts for the US taxation profile.
Top 1% of income earners - share of all income: 22%, share of all income taxes paid: 42%. Average income tax rate: 26%.
So you've got the top 1% paying 42% of all income taxes. If they actually controlled taxation (ie if the US system of government worked by bribery as is so often incorrectly claimed), it's very clear that wouldn't be how things work.
5% to 1% bracket - share of all income: 16%, share of all income taxes paid: 20%. Average income tax rate: 17%.
10% to 5% bracket - share of all income: 11%, share of all income taxes paid: 11%. Average income tax rate: 13%.
25% to 10% bracket - share of all income: 21%, share of all income taxes paid: 15%. Average income tax rate: 10%.
50% to 25% bracket - share of all income: 19%, share of all income taxes paid: 9%. Average income tax rate: 7%.
Bottom 50% - share of all income: 10%. Share of all income taxes paid: 2%.
Taxpayers in the US earning under $42,000 had an average income tax rate of 3%.
Similarly talking about progressive income tax and ignore other forms of taxation is silly. Way more than 3% of the lower 50% income goes to taxes they just aren't federal income tax.
“Income taxes” are only about 57% of federal taxes on income. And the other 43% are bottom-weighted payroll taxes.
This is incorrect. The claim was always pays a lower tax rate (federal), because the tax rate for capital gains is less than earned income.
How does this work? Suppose that someone donates $1 million to charity. They don't pay income tax on that money -- but they no longer have the money. I suppose that they could try to get clever about it by making a "buy yachts for our donors" charity, but that's explicitly illegal under the 501(c)(3) requirements.