Merry Christmas from Annapolis!
So much talk about the failing American automotive industry, and the suggestion that there should be another bailout, have caused me to take a closer look at what we can do at the state level to help our local car dealers and their employees and the local auto parts manufacturers.
First, as you probably already know, I do not support another bailout, including that for the auto industry. From talking to local dealers, it is clear to me that the bailout would do nothing locally to help Marylanders. So I am drafting legislation to suspend the 6% new car tax on American-built cars and trucks from the Big Three auto makers for a 90-day period, starting in the middle of February 2009. This will give an instant rebate to the purchaser of the vehicle, who of course would be a Maryland taxpayer. With the discounts that American auto dealers are already offering, this will add another 6% to that discount, making the average discount about 20%. As one dealer told me, that should be enough incentive to help carry them through this economic downturn and prevent them from having to make additional layoffs. The cost of these layoffs to all Marylanders would greatly outweigh the cost of suspending the tax for a short 90-day period.
I hope to meet some time this week with Mr. Kitzmiller from the automotive dealers association to work on a plan to promote new cars for sale and this important piece of legislation, which is not a hand-out or a hands-up approach, but instead is a 90-day hands-off of the auto industry to help them recover on their own.
The average taxes on a new car range from $1500 to $2000, and in most cases you cannot finance that cost related to purchase. So in reality what this bill does is put that money into the purchaser’s hands as a down payment — without the State spending a dime.
Rick Impallaria
Delegate, District 7
rick.impallaria@house.state.md.us
Delegate Rick,
While I generally agree with the idea and philosophy you’re conveying, I take issue with your last line “without the State spending a dime”. While that statement is true on the surface, based upon your own statement, the State would lose $1500 to $2000 on average, per vehicle sold AND registered in Maryland. So I ask you this….Are there any potential ramifications for the lost revenue that WOULD have come into the State coffers if your proposed legislation is enacted? I’m not playing semantics (like “taxes” -vs- “fees”), I’m just asking the question because I’m hoping that the POTENTIAL loss of revenue to the State wouldn’t be passed on to the Counties and Municipalities.
Thank You,
Council President Mike
Mike Hiob has to quit using logic! You’ve been in government long enough to know that the same rules that apply to business can not be used in government. Rick is right in that it won’t cost the State anything and you are right in thinking that the lost revenue source will be damaging. Ultimately all levels; State, County and Municipality will continue to cost the same plus annual increases, so any lost source has to be accounted for somewhere else. If the State cuts off a revenue source the end result is that the local governments have to make up for it in higher real estate taxes. The only way that I could ever support Delegate Rick’s idea is if he could show how the State would accommodate the lost revenue, i.e. cutting the legislative payroll by the same amount!
Why should this support only the big 3? Most of the foreign-based automakers assemble their cars here, relying on U.S. citizens to provide the labor. Why should they be exempt from this tax? Are these Honda’s and Toyota’s not “American-built”?
Think you’re on to something, Steve. This amounts to a protectionist tariff on all foreign makes. And, like Dave says, the revenue will have to be made up from some other source. Would they then not have to RAISE the taxes on these vehicles to make up the difference?