Car tax pipe dream?

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Could it be that Rhode Islanders don’t believe what they would like to believe?

That would be our conclusion after the recent Bryant Hassenfeld Institute for Public Leadership poll that looked at the two proposals concerning the elimination or reduction of the car tax among other issues. Not surprisingly, those polled favored a reduction in car taxes.

Who wouldn’t like to pay fewer taxes?

That’s what Gov. Gina Raimondo’s plan would do. She proposes that the tax be based on a vehicle’s average trade-in value rather than its clean value, effectively lowering the tax by 30 percent. Motor vehicle valuations have been an issue ever since the state virtually eliminated its program to phase out the tax by annually increasing exemptions. With the exemptions gone, people were suddenly taxed on clunkers they knew were worth nowhere near what they were being valued for.

Raimondo’s plan would go a long way in establishing realistic motor vehicle valuations, although it would not totally eliminate lower valued vehicles from taxation, as had been the case with exemptions.

Then there’s the surprise of the poll. When presented the governor’s plan and that of House Speaker Nicholas Mattiello to completely eliminate the car tax over five years – using the exemption system – respondents favored Raimondo’s plan by more than 72 percent. Mattiello’s plan got 52.2 percent.

Rhode Islanders aren’t slouches. Raimondo’s plan would mean a bigger cut in taxes in the first year. Long range, Mattiello’s plan comes out ahead.

We give poll respondents credit for doing the math, but could it be that they see any reduction in taxes a pipe dream and were willing to bet on one year, not five? The governor’s plan would mean the state would need to reimburse cities and towns $63 million for lost tax revenues every year going forward. Mattiello’s plan wouldn’t be as costly in the first year, but by the fifth year would require a $215 million annual reimbursement to municipalities.

This all seems a stretch given the uncertainty of other state costs with the change of administration in Washington, other programs like free college tuition that Raimondo would like to implement and a Rhode Island economy that is still sputtering despite some improved job numbers.

The Rhode Island League of Cities and Towns would love to see car taxes reduced or wiped off the books as long as the plan is sustainable. Sustainable means for the state to reimburse the cities and towns what they would have otherwise collected.

Sustainable is the operative word. Lowering or eliminating the car tax would be terrific as long as it doesn’t mean an increase of taxes elsewhere or the loss of vital services.

So far, neither Raimondo nor Mattiello have offered a viable budget plan to accompany their call to cut the car tax, and until they do Rhode Islanders should consider it a pipe dream.

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TheSkipper

The first thing they should do is eliminate the car tax for Disabled People on SSI and SSDI it is of the greatest burden to them. It's not like they're driving brand new Cadillacs or Mercedes-Benz. Along with the two year extortion....I mean Inspection....where the mechanic gets to estimate what they can screw you every couple of years, it adds up quick. An automobile is no longer a luxury in this day and age, and the busses absolutely stink unless you live in Providence.

Meanwhile while they tell you "leave the driving to us...." The rest of the state is better off sticking their thumbs out than waiting for public transportation.

So it's only fair to give the neediest of people the first of relief from the burden of overbearing unfair taxation.

Tuesday, April 25
Wrwk75

We need to pay for roads. Taxing cars is one way to do that. Taxing other things is another way to do it. If you don't tax cars, you have to tax other things. Those other things are likely less related to roads than cars, which is relevant. But also relevant is that property tax is regressive, while income tax, for example, is progressive. The existing car tax is a little less regressive than it could be -- for example, you could have a system where every car carries the same tax amount, say $500 per car, regardless of car value, or one that taxes miles driven versus just owning a car -- those ideas would more closely align road use to care tax, but they'd also likely shift more tax to lower-income taxpayers. No one should be under the illusion that elimination or reduction of the car tax is the same as elimination or reduction of the tax amount -- it will just be shifted from one set of government claws to another, and the new claws might dig in deeper or less deep to certain people than the old claws.

Tuesday, April 25
patientman

Wrwk75, The city takes in millions in car tax revenue. In most years there have been little or no money budgeted for the roads. Someone, in an earlier article posted that with the miles of road that Warwick is responsible for maintaining, we should be budgeting $8,000,000 a year. There is more than enough car tax revenue. That is not the problem.

Tuesday, May 2
davebarry109

Wrwk75...the miles driven thing is a pipedream of socialists. You are already taxed for the miles you drive when you pay the gas tax. The more miles you drive, the more gas you need and therefore, the more taxes you pay. Having the government monitor your driving is scary. We would be allowing the government to spy on us since this would involve tracking your vehicle. They could just raise the gas tax, as anyone who drives pay the tax. That makes more sense.

Monday, May 8