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Part 1: Mark Baumer Reflection: Impounding Vehicles & Immigrant Rights

This is part of a multi-part reflection I've been doing following the death of my friend, Mark Baumer . There's nothing graphic i...

Simple Mathematics

Eliminating the car tax will exclude the poorest Rhode Islanders entirely. Although eliminating the car tax would incidentally benefit some lower middle class people, it would do so in a trickle-down fashion. Eliminating the car tax is Reaganomics, and progressive Rhode Island legislators should stand up against the elimination plan Speaker Mattiello is pushing.

This new BMW from the website of BMW of Warwick has an MSRP of $54,825.

I don't have an encyclopedic database of what cars are owned by different wealthy Providence residents, but I think it's safe to assume that someone (many people, really) own cars like this on the East Side.

This car would have $3,169.50 due to the City of Providence at its 6% rate*. At the lowest municipal rate in Rhode Island, in New Shoreham, the car tax due on this car would add up to $534.54**. For comparison, again, the most efficient way to pay for RIPTA is to use monthly passes, which would cost a user $840 by the end of one year.

Keep in mind that the further up the economic scale you go, the more likely a household has multiple cars. It's quite possible that a single wealthy household is paying more than $6,000 in car taxes.

This used Chevrolet Malibu from CarMax has a "no haggle price" of $9,998. This car actually is twice the value of the car Rachel owns, so I'm not reaching for crazy outlandish examples. In Providence, this modest car pays $599.88 $478.80*** in car taxes. The New Shoreham owner of such a car would pay $97.48. 

Again, for comparison, the cost of a year's worth of RIPTA monthly passes (which saves you from the now $1.00 (!) transfer fees) is $840.

Fixing the basic inequality between different municipal rates through a "one state, one rate" approach makes sense, but not elimination of the tax.

Eliminating the car tax would pursue a Reaganomics agenda, because in order for someone to get $599.98 back on their modest car, someone with a fancy car would get more than five times more. Car tax elimination would exclude the poorest Rhode Islanders who don't or can't own a car, and would lavish unnecessary money on the wealthy. All the create a $215 million budget hole.

There's no way around it: $599 means more to someone who drives an old Malibu than someone who drives a brand new BMW. But that's the argument Republicans make when they justify cutting taxes on the rich because all income brackets will get a tax cut. To be honest, if someone handed me $600, I'd find it hard to turn down, because $600 means a lot to me. But our budgeting shouldn't be designed to give away more than $3,000 to someone else just to get that result. We can get working class Rhode Islanders an extra $600 without any difficulty, while approaching that tax return through a different tax. I favor the Earned Income Tax Credit. Rhode Island spends $190 million on the EITC, according to the National Conference of State Legislatures. We could double the number of people who receive this tax for less than what the cost of eliminating the car tax would cost.

The lowest rung of the economic ladder is least likely to own a car, and most likely if they do own a car to be a one-car household and struggling to pay for the costs of auto upkeep. It would cost less than half of what eliminating the car tax costs ($94 million) to triple-- yes, multiply by three-- the amount of money RIPTA receives from the state as it would cost to repeal the car tax throughout Rhode Island's municipalities ($215 million).

Finding approaches that relieve the stress of the car tax without subsidizing cars would be the best way to go for the legislature, because the people who we imagine being most harmed by the car tax would be those who would benefit most from truly progressive policy. We can implement better policies than the ones being proposed.

*There's an exclusion of the first $2,000 of value on a car in Providence's car tax.
**New Shoreham (Block Island) charges $9.75 per $1,000 of value, or 0.975%.
***My error in the first version of this was forgetting to subtract the first $2,000 of value for the car before multiplying by 6%.

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