Question 2: Cut is worse than the tax
We dislike Maine's automobile excise tax.
Paying an annual chunk of money for owning a car grates against our more Libertarian sensibilities. That the tax is based on a vehicle's Manufacturer's Suggested Retail Price also adds insult to agony, since MSRP is a fairy tale figure. Nobody pays it.
Yet even though the excise tax provokes this visceral reaction, we do not favor Question 2, which asks Maine voters to chop it in half, and create tax incentives to purchase "green" vehicles. We might be ornery, but we're not myopic.
Cutting the excise tax like this would be worse than leaving it intact.
Here's why: A tax shift will happen. It's unavoidable. Cutting the excise tax will be felt on property taxes, as municipal governments have few places to raise revenue. The money must come from somewhere; that somewhere will be owners of homes and commercial property.
Halving the excise tax does nothing to reform its underlying unfairness. What's needed is a sensible tax, not just a lower bad one. For lawmakers, the automobile excise tax is overdue for attention from the same wise minds behind this session's laudable tax-reform bill.
The chief flaw with Maine's tax is its basis, the MSRP. Massachusetts, for example, bases its excise tax on the value of vehicles, a much fairer assessment. Oklahoma bases its excise tax on a new vehicle's sale price or a used vehicle's value, which are both realistic.
Setting Maine excise tax to vehicle value or sale price could accomplish several goals: make the tax more defensible, reduce its cost to taxpayers and weaken any disincentive to new automobile sales the current excise tax may create. Let's try doing this first, before considering ideas like Question 2, which is a blatant anti-tax initiative clad in an ill-fitting green suit.
While the plan it espouses certainly fulfills some agendas — particularly those of the organization trumpeting it, Maine Leads — the initiative as a whole makes little sense for voters and taxpayers. The vast majority of Maine vehicle owners pay minimum excise taxes (72 percent in Lewiston, for example) so the prospective cuts are minimal and will be more than likely offset by increases to property taxes.
Yes, of course: We dislike the excise tax, and cutting it in half would feel good.
But it's not the smart thing to do. That's why we say vote No on Question 2.
TravelMug says
I've seen a lot of complaints from people on here about not only the excise tax in general but the fact that it's based on MSRP. First off what do you propose it should be based on? Actual sale price? Some states tried that, turns out it was a bad idea. What happens is you buy a new car and pay the full tax the first year, the next year you sell it to your wife/child or someone else, on the bill of sale you put $1.00 and the state can only charge you tax on $1.00. The next scenario, you actually sell your car to someone else, he pays you $3,000.00 and on the bill of sale you write that you sold it to him for $1.00 and every year he only has to pay taxes for $1.00. Who foots the bill for this deception? The honest people and new car buyers.
Here's another dose of reality for you. When my truck was registered in another state I paid 4 times what I pay in Maine. You are right though, there isn't excise tax in some other states, but rest assured that in most states there is some other annual fee incurred from owning a vehicle. No one drives for free. The roads don't take care of themselves and the excise tax in Maine is miniscule compared to others.
Another argument for no is nowhere in this bill does it state exactly where the balance this significant drop in state and town/city revenue is going to come from. In other words there is no plan to recover the lost income. This is also in essence a double decrease as the reduced fuel consumption will decrease the amount of state taxed fuel purchased. I’m sorry, but if you’re going to propose a law you need to mitigate the adverse effects that law is going to have on the state and local government and the people. If you ask me, the incentive for buying a fuel efficient vehicle should be left strictly to the reduced cost in fuel the consumer will experience. Anything more is wasting money that this state desperately needs. Another argument is that not everybody can use a fuel efficient vehicle. Am I to go to work and upon returning home, park my fuel efficient vehicle at the end of my driveway after a foot of snow has accumulated until I am able to sufficiently clear my 700′ long driveway? Please don’t tell me that I only represent a small portion of the population. If you feel the agenda of fuel efficient vehicles need to be pushed in Maine then assemble all of the auto dealers together and ask them to fund the production of a commercial, then go to the television and radio stations and ask them to air it for free.