Now is the time to eliminate car tax
The car tax is a stone in everyone’s shoe. No matter how much one makes, no matter what model car one drives, no matter where one lives – taxpayers despise the car tax.
Every year municipalities reach deep into taxpayer’s pockets and charge a significant amount of taxes on the depreciating value of their motor vehicles. Amazingly, the taxes on these depreciating assets never seem to go down.
Rhode Island ranks in the bottom fifth of states in nearly every national study of property tax burden. This burden affects the quality of life of our residents and our status as an outlier deters business investment. We can address our local property tax structure, beginning with the elimination of the car tax, if we proceed with urgency and focus.
Three years ago, Rhode Island had the highest corporate income tax in New England. We were a regional outlier and businesses were fleeing our state – never mind looking to relocate here. We acted decisively and reduced our corporate income tax rate to the lowest in New England.
The business community took notice. Fortune 500 companies, such as General Electric, have made sizable investments in our economy and workforce. Small businesses have also reinvested in their companies, which has stabilized our local economy.
We have also worked to provide meaningful tax relief for Cranston and Rhode Island residents. We eliminated the income tax on Social Security benefits for most retirees. We expanded the Earned Income Tax Credit to increase tax refunds for working families. We raised the estate tax exemption so small business owners could afford to leave their family business to their children.
Instead of resting on our laurels, we must continue to reform other burdensome taxes. The current car tax system is beyond repair: cars are overvalued, rates vary significantly between communities, and, unlike car payments, the tax never ends. We can eliminate the car tax within five years if we make it a priority. I have no doubt that we will be successful in our efforts to reduce the car tax, just as we have been successful in our other efforts to reform taxes.
Nicholas A. Mattiello, a Democrat, is the speaker of the Rhode Island House of Representatives. He represents District 15 in Cranston.