Wednesday, May 17, 2006

CPR for a Lifeless Tax Cut

Watch for Gov. Rell to use her failed plan to repeal property taxes on cars as a major campaign issue this fall.
Gov. M. Jodi Rell vowed to resurrect her proposal to eliminate the car tax, making it clear her top priority, which failed in the legislature, would be a key issue in this year's gubernatorial campaign.

"Don't you just swear a little under your breath every time you have to pay this tax?" Rell said, adding just 11 states tax automobiles. "If you get rid of the tax, you will have real property tax relief you can see." (Lucas)

The car tax was torpedoed in part because municipalities felt it would cost them money, and that the administration's numbers didn't add up. Democrats instead focused on income tax credits for homeowners.

This might be a useful issue for Rell. A little over half of respondants approved of the idea of repealing the car tax in a February Quinnipiac Poll. Then again, it seems that the more people hear about the car tax repeal, the less they like it. So we'll see.


Lucas, Fred. "Rell to revive ban on car tax." Danbury News-Times 17 May, 2006.


A Real Democrat said...
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superD said...

Interesting news, and it makes you wonder if all of DeStefano's hype this past week -- saying he's got the convention votes he needs -- is all a big fat hoax. Sounds like he may be relying on tricks to steal a win. Does this mean he knows he doesn't have enough votes to win on his own? Its almost laughable if it weren't so shameful.

stomv said...

Now I know that there are few parts of Connecticut that are truly friendly for non-drivers, but...

if automobile traffic is such a problem in Connecticut, doesn't taxing automobiles make sense? If you want less of a behavior, creating a financial disincentive is the way to make progress.

Yeah yeah, maybe this argument carries much more weight in Mass (Boston) or New York (NYC) because it'd be really hard to hold a good job in Connecticut without owning a car -- but maybe that too is part of the problem.

P.S. I currently live in Boston MA, and I do not own a car. I use the T (subway), walk, or ride a bike. And yes, part of the reason I live where I do is so that I can not own a car and still enjoy my community.

bluecoat said...

if automobile traffic is such a problem in Connecticut, doesn't taxing automobiles make sense? If you want less of a behavior, creating a financial disincentive is the way to make progress.,

Yes, but the charge needs to be fair. Charge (higher) fees to register based on weight, axles and other stuff. BUT don't tax on the value of the car and with 169 different mill rates.

GMR said...

I'm rather puzzled by the Democrat's opposition to the car tax. In Connecticut, your car tax is based on the mill rate, which is influenced by how much property (business property, homes, land and cars) there exists in the town and what the budget needs are.

This means that in a town like Greenwich, with a large grand list and a comparatively small school population, the mill rate is quite low compared to a city like New Haven or Waterbury.

This means that you get massive distortions: a new BMW in Greenwich can have less property tax than a used Chevy in New Haven.

Sure, a few people in Greenwich have really expensive cars, but in reality, the car tax is much more of a regressive tax than just about any other tax in the state.

The income tax is not that progressive, but it isn't regressive. Sales tax has the potential to be regressive, except that groceries and $50 and under clothing is exempt, so it's probably not that regressive.

Normal property tax could possibly be regressive, except that the lower income earners are going to have lower valued homes, which will mean that at the end of the day, their actual payment is probably less.

But the car tax is clearly one of the most regressive. Unlike houses, which vary widely in price throughout the state, cars are more or less the same price, and will always have the same blue book value, whether in Hartford or Greenwich. The gas tax is probably equally regressive, except even the gas tax isn't higher in the less affluent towns the way the car tax is.

bluecoat said...

Houses vary in price from town to city often because of property tax rates. It's often about the monthly payment - insurance, interest, principal and taxes.