Ye Olde Staging Point

Hideous. Another example of shifting the tax burden onto the poor via regressive taxation. (I understand that while Bush on the campaign trail trumpeted his "tax cuts" during his time in office in Texas, he failed to mention that sales tax and other regressive taxations had been jacked UP during his time in office... Taxes like that, that hit poor people hardest, don't count as "taxes" in politician-speak, so they're fair game....)

Here's the basic economics of the CA fiscal crisis: Since Gray Davis became governor in 1998, tax revenues (even with the "recession") have increased by 25%. Inflation plus state population increased by 24%. Therefore, we should still have a surplus, right? Wrong, state spending increased by 37%, leaving us with the biggest budget deficit in the history of state governments. So, what's the remedy of Davis and Cruz Bustamante? A program they call "Tough Love" which includes $10 billion in tax increases and cuts only in the RATE OF INCREASE of spending. No tough decisions, just another stomp on the necks of taxpayers so we cough up a little more.

Oh, don't worry about this tax increase affecting the poor. It was specifically designed to place a heavier burden on the evil rich people. The tax is based on the value of the vehicle. Those with a more expensive vehicle can expect to pay a higher tax than those with a less expensive vehicle. My vehicle registration fee is due December 10, and I just received my bill in the mail. I owe $298. I guess that's what I get for driving a luxury automobile. If only I would have gotten the XE model Nissan Sentra instead of the SE...

Luxury car owners pay more? oh crap, so that means the fee on say....a 1989 Cadillac Sedan DeVille will be in the thousands. I knew I shouldn't have sold the Buick Skylark to you Jeff...

What are you guys talking about? Don't you know that there is no car tax. It's a vehicle license fee (VLF).

If you want to know why liberal Democrats have finally hit a wall in their spill and spend attitude, you need go no further than the L.A. Times op-ed section. Listen to this editorial entitled "Arnold Flexes Revolution Among the Suffering 'Haves'":

"The hike in the annual car tax puts it among the highest in the nation. But on the average car, we're talking about a jump from $70 to $210. Not exactly chump change, but it's quite a spectacle to see people delirious over a savings of $140, especially when it will mean $4 billion in cuts that Schwarzenegger has yet to explain."

And here: "We're in the most prosperous state of the richest country in the history of man, but how can you feel good about yourself — let alone worry about the textbook shortage — when your next-door neighbor just got a big-screen TV two feet wider than yours?" You can find the whole article at http://www.latimes.com/news/local/la-me-lopez6oct06,1,1134802.story

Clearly, Democrats in this state seem to think that they are ENTITLED to my money to spend as they will, because if left to myself I will just waste it. If they think more textbooks are needed, who am I to tell them I want to keep $140 rather than let them have it? I guarantee that the overall economic picture would be better served if I went and bought a computer game and a few DVDs with my $140 rather than giving it to the government.

I love government telling us to give until it hurts or to embrace a "Tough Love" policy of more taxing and maybe a little less spending. Today Californians in record numbers are telling the government: "I got your Tough Love right here."

Now that I think about it, my sister drives an SUV, the most evil type of vehicle imaginable. That must explain the incredibly high registration tax--she must be punished for her Earth-destroying choice of vehicle!

Oh, your sister drives an SUV? Then I withdraw my outrage. The government has every right to tell us what vehicles we may and may not drive.

Besides, after giving it some more thought the government does have to give you a new sticker for your license plate, give you a new registration card and change your info in their computers. I guess I can see how that could cost upwards of $800. Those stickers are NICE.

I guess my $56 Licencing fee and no state income tax in Washington isn't as bad as I thought it was.

From my limited understanding of California state politics (I'm sitting over here in Michigan), these fees are "supposed" to discourage people from buying petroleum-fueled vehicles and move towards the less-polluting fueled cars--and the fees, of course, are spent to protect California's natural resources. This is nice in theory, but American governments have rarely been able to "persuade" its citizens to change its habits. Change comes most readily in America when Americans are ready to change. In California, change might come when Californians rise up and start buying more alternative-fueled automobiles; right now, those alternative cars sit rusting on the lots of car dealers, who are required by State law to stock them (this was also a state attempt to force changes in consumer purchasing behaviors--only in this case, it was the car dealers who footed the bill).

A few months ago my aunt from San Francisco was visiting us and, during the course of some conversation pertaining to the Middle East and the problems we cause it by giving it our money for their oil, muttered, "I hate petroleum cars." This deeply-rooted feeling is a bud that could grow into a conviction, which can lead to a change in purchasing decisions. but she and her husband own two Japanese cars and a massive Dodge Ram (for Napa Valley, not maneuvering around S.F.'s streets).

When she and enough other like-minded people change their buying habits, Detroit will begin churning out alternative-fueled cars to meet the demand. It'll bring about economic growth, diminish pollution from hydrocarbons, and bring about problems of its own. Oh yeah, and California's licensing fees? They'll surely decrease... only the fee will move to another part of your life, because by then you'll be resigned to forking over your bucks.

I wish California well. They're grappling with changes that will come to other States, only it sounds like a painful way to go about doing it.

I'd have to disagree with you, Heather, about the demand for alternative-fuel cars. Hybrids, at least, are flying off the lots in Southern California. Toyota can't keep their Prius' in stock. Not a day goes by that I don't see a hybrid Prius, Civic or Insight. And although they are subsidized slightly by the government, a much bigger subsidy comes from Toyota and Honda, who are hoping to capture market share. And it's working. The new '04 Prius is almost the size of a Camry, gets 50 miles to the gallon, and costs around $20k. That kind of performance is going to generate demand, even outside of CA.

(That makes it sound like I'm slightly subsidized by Toyota.)

I have to agree with Mark, in that the car tax is nothing more than a revenue matter. In fact, giving discounts actually hurts the state's budget problem.

As the car tax legislation currently stands (it's interesting at this point to note that all the legislation speaks about this being a tax and any relief being a tax cut in stark contrast to the Gov's assertion that this is a fee), the state government is required to give 100% of the proceeds to cities and counties. One hundred percent.

In 1998, the legislature decided that people were paying too much on this tax, and enacted a series of laws to roll back the car tax. Through complex triggers, based on increasing state revenues, the car tax was rolled back until it hit its maximum cut in 2000. Provisions in the legislation did not provide a mechanism for reducing the tax cut in the event state revenues decreased. (This becomes important.)

The amount of revenue given to the cities and counties would have decreased when state revenues began to fall during the economic downturn. To insure that cities and counties would not lose revenues, the state passed legislation in the form of spending programs that would allow them to reimburse local government losses for the reduced car tax revenue. In 2002-2003, this reimbursement amounted to somewhere in the neighborhood of $3.8 billion, and added $3.8 billion to the budget deficit.

In an attempt to correct this, Gov. Davis on his own initiative and without legislative approval decided to roll back the car tax to its 1998 rate. He did so based on the conclusion that the law suggested an ability to roll back the tax cuts if the state revenues went down (there is no such reverse trigger in the legislation). Therefore, he tried to sell it as an automatic sunset provision in the law. Voters didn't buy it.

So, in order to get this $3.8 billion in deficit off the books, California car owners would have had to pay somewhere in the neighborhood of $2 billion dollars in added taxes just to preserve the status quo in revenues to the cities and counties. The billions in new taxes would have allowed the state to cease their spending in order to subsidize local governments, but taxpayers would have no tangible benefit from this tax increase. It also means that Californians were deprived of a tax cut by Gov. Davis without legislative approval (which is often why it is referred to out here as the "illegal tripling of the car tax").

Going back to incentives for hybrid and alternative fuel-source autos, any incentive just means more money the state would have to pay to cover that incentive when making payments to the city and county governments. Actually, those kinds of programs increase the deficit and don't help that particular problem, even if the car tax was returned to the 1998 rate.

The real reason the Dems wanted to mess with the car tax cut is that it is a solid, predictable source of revenue that would solve close to $4 billion dollars of deficit spending. But it does so at a cost of billions to the taxpayers just to maintain the same services to local government. Plus, there’s no guarantee that with that $4 billion in hand, the government wouldn’t have turned right around and put that money into another spending program.

Voters' response: We're not pay an extra few billion to maintain the status quo. Find the money somewhere else.