An open letter about the Virginia Car Tax

Dear Delegate Englin and Senator Ticer,

I recently read in the Washington Examiner that some in the Virginia Assembly are considering resurrecting the full car tax. For lack of a better car analogy, this is a non-starter for me. If you vote for this, you lose my vote.

Currently, I pay about $65 annually in car taxes on my 1999 Honda Civic. Assuming that we’re using the 70% state / 30% person ratio that the County spells out on its webpage, if there were full repeal of the Personal Property Tax Relief Act of 1998, I would owe $216 in car taxes annually ($65=.3Y, [Y would equal $216]). If my car were in perfect condition, and it’s not, Kelly Blue Book says it’s worth about $5,705. Which means I currently pay 1.14% of my car’s value every year in taxes. If my taxes were raised to the full amount of $216, that would equal 3.78% of my car’s value annually.

Aside from the fact that I do not like having to pay taxes on my car, though I understand the point of paying for roads and such, this formula is absurd. Why, in my right mind, would I ever purchase a new car in Virginia? I don’t have the formula in front of me, but let’s say I buy a 2010 Honda Civic 2-door EX-L Coupe, which is the newest version of my car and assume the same effective rates. That car costs $21,715. Assuming it’s worth $20,000 the year I buy it, I’d be paying $228 yearly at 1.14% and $756 at 3.78%. Such a confiscatory tax discourages people from buying new cars.

Now, I realize the rate varies by your municipality, and presumably, that funds go to the county or city. When I lived in Alexandria City, my yearly car taxes were about $120 a year ($400 if I paid the 100% amount — 7% of my car’s value, every year.) That’s one reason I moved out of Alexandria and into Fairfax County. But that’s besides the point.

The Examiner article quotes Senate Finance Chairman Charles Colgan, D-Manassas, as saying “I don’t think [Senate Democrats] are going to want to take the severe cuts that we’re probably going to take, they’d rather see a tax increase of some sort.”

Wrong. Do not increase taxes. Cut spending. If you’d like some suggestions on what to cut, point me to where I can get a detailed copy of each state expenditure. I know the budget deficit is big, and I don’t know how much this tax increase would raise, but it’s ill-advised. I poked around the Virginia Department of Planning and Budget website and looked through an excel sheet entitled: Fiscal Year to Date GF Operating Expenditure Report by Agency (as of September 30, 2009). It’s merely an overview, but here’s an initial thought.

Why is there an appropriation for Jefferson Science Associates, LLC for $1.2 million? According to their webpage the group “JSA, LLC is a SURA/CSC company created specifically to manage and operate the Thomas Jefferson National Accelerator Facility (Jefferson Lab) for the U.S. Department of Energy’s Office of Science.” So, why does the Commonwealth of Virginia need to give them a dime? I’m sure if I could dig through each agency’s detailed expenditures, I could find more. But you get my point.

Don’t raise taxes, cut spending.

Thanks for your time.

Jim

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2 Thoughts on “An open letter about the Virginia Car Tax

  1. Also worth noting that, high tax municipalities, like Alexandria encourage people to drive older cars longer. Assuming that, for the most part, older cars have worse MPG ratings than newer cars, people are encouraged to
    a.) consume more oil
    b.) as a result, contribute more in emissions

    Just some thoughts.

  2. consume more oil? what about the energy costs required to put together the new car that you buy as a result of not keeping your old car? same for emissions of car factory/plants etc whatever.

    How about considering the money saved when keeping your old car and not buying the new one? Aren’t our personal spending and poor consumerist habits worth being addressed? savings accounts are SO 2009!

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