The proposed cut to the car tax is extremely popular. But I'll bet you $60.00 I can change your mind about it.
$60.00 is the amount of the proposed cut, per vehicle. This has been sold as being about protecting the most vulnerable, but the tax cut is actually a flat one. Every person who owns a car gets $60.00 back (except if they own two cars-- then they get $120.00). The only people who don't get a tax cut are those who don't own a car. Super progressive, right?
If the goal of the tax cut is to help the most vulnerable, Mayor Elorza and Providence City Council aren't choosing a very efficient way to do that. They will give many people a tax cut who are poor (including us-- yes, we bought a car, and both our tax receipts for 2015 were under $20,000). But a lot of middle class people (and flat-out rich people) will get the same tax cut (or a greater one, if they own multiple vehicles).
But of course, while many people who drive do struggle to pay the car tax, those who don't drive are overwhelmingly poor. 25% of Providençe households are car-free. For a neighborhood like Olneyville, that jumps to nearly 50%.
How Does the Math Work?
Providence car tax is currently set to $60.00 per $1,000.00 of value, but there is a $1,000.00 exemption. If your car is worth $1,000.00, you pay nothing. $2,000.00, you pay $60.00. $20,000.00? $1,140 ($20,000.00 - $1,000.00 x $60.00).
Under the new plan,the exemption would go to $2,000.00. That does mean that only those at the very bottom of car value (below $2,000.00) would go to zero. But just as with the other exemption, that figure carries up the economic scale. The $20,000.00 vehicle owner would now pay $1080.00-- the same $60.00 tax cut as the jallopy owner gets). If the person owns two vehicles, whether they're Flintstonemobiles with rusted out floors, or $40,000.00 BMWs, they get twice what the person with one car gets: $120.00.
To Heck with Your Math, James. I Want a Tax Cut.
I'm not saying you should be against a tax cut. I'm saying you should want a different structure to the tax cut.
Let's give everyone a tax cut: $60.00 per adult taxpayer. No double-ups, as with the previous tax cut, but unlike the Elorza proposal, every household would benefit. If our goal is to get the poorest people a tax cut, then we have to include the households without cars.