Tuesday, July 14, 2009

Taxing CO2

Commentary from Mary Alice Haddad

Like many of my neighbors, I received my semi-annual car tax in the mail last week. I have two cars and in comparing the two bills I was shocked to realize that a gas-guzzling, CO2 emitting older car would have a significantly lower tax than a newer, more fuel efficient one. I would like to call for Middletown to join other forward-looking cities around the world to revamp its car tax. Our car tax should be based on CO2 emissions.

An eco-tax, as it is commonly called, benefits everyone. It creates an incentive for people to get rid of their older, high emission vehicles and purchase newer, more fuel efficient ones—this benefits the planet, our air and quality of life, and also the auto industry and its employees since it promotes new car sales. It benefits the city government because the eco-tax does not go down over time but remains tied to the emissions of the vehicle, creating a more stable tax base for city and reducing administrative burdens associated with re-calculating taxes on every vehicle every year. Finally, it benefits Middletown residents because our air will be cleaner, our taxes will be more predictable, and, if some of the proceeds of the eco-tax are directed toward alternative forms of transportation, we will have better public transportation and more bike paths.

The greatest downside of this kind of tax is that it usually hits the poorest residents hardest since they are often the owners of older cars. In Berlin, one city that has recently introduced an eco-tax, there are two policy solutions to address this problem. First, there is a “hardship” exemption to the tax if a resident can demonstrate that paying the tax would be an economic hardship. Second, a portion of the proceeds of the tax are put into fund that offers residents some amount (say, $2000) to apply towards the purchase of a new, more fuel efficient vehicle within a certain time period (one or two years after the initiation of the program). Any resident can take advantage of this incentive program, so it would benefit any Middletown resident who sought to replace an old car with a more fuel efficient vehicle.

As our Representatives in Congress continue to debate the best way for the federal government to promote the green economy and reduce our carbon emissions as a country, Middletown should do its part and look to ways that small policy changes in our own community can mean big changes for our country and our planet.


Karen Swartz said...

I agree with the eco-tax concept but I am a little confused on why or how newer equates to more fuel efficient. For example you could buy a used 10 -year old Honda that would have better fuel economy than many new cars made today. Cars do tend to lose some efficiency over time, but there's more to it than simply new car versus old car. I think that the car tax should also incorporate the average amount of miles you are driving. You may own a much older car because perhaps you only drive it 5000 miles per year, so its getting much less wear and tear and therefore you are able to keep it for a longer period of time than a car that is being driven 10000 or 20000 miles per year. In this example you are "taxing" city resources much less if you are driving less miles, you are emitting less and using the roads less too. So why should you pay more tax simply because your car is an older model year? Factoring in the miles driven per year allows a more true measure of the annual carbon emmissions and if the tax bill was tied to this could also encourage people to drive less, utilizing carpools, bicycling, buses etc. Auto insurance companies always ask for the estimate of how many miles per year you will be driving in order to adjust your rates accordingly, so the tax bill could use the same information.

David Bauer said...

This is an interesting post suggesting that Middletown assess a motor vehicle or any type of asset on a different basis than it's Fair Market Value.

I have always been impressed at how little a Municipality is allowed to do under State Statute.

I checked Sec 7-148(c)(2)(B) and it seems that an eco-tax on vehicles is not explicitly prohibited.


If you can possibly spare the time, reading all of Title 7, Chapter 98, is a real eye-opener on what powers the State grants to Municipalities.

Anonymous said...

Ms. Swartz makes a lot of sense in her letter which, unfortunately, is it's greatest fault.You are not supposed to be THINKING about these things! You must accept them for what they are-another reason to tax. What's next? Taxing how much fuel oil you burn? Putting sensors on your chimneys and taxing you on that?
We emit CO2 when we breathe. Maybe we will be taxed on average respirations per year.The environmental wackos are after your cars. Always were, always will be.
Smarten up sheeple!
(P.S.-how's that "global warming" thing coming along?)

Anonymous said...

Any new tax is outrageous! We are over taxed. This eco tax scam is just another way of adding a layer of taxation. The benefits of an eco tax are dubious at best. It will penalize owners of classic cars. It will penalize the poor. It will penalize the college student in need of cheap transportation. Any means to adjust for these issues just creates more layers of government more government regulation and is unnecessary. People will naturally be attracted to the cheapest and most efficient form of transportation that suits their individual need. Government needs to stay out of it! The only thing the State of Connecticut should be considering is the abolishment of the personal property tax.

NOBO said...

With all due respect for Mr. Bauer,I checked that Statute and found nothing pertaining to taxes. It referenced "excessive rental charges." Perhaps he cited the incorrect section.

David Bauer said...


I'll print out the section I was referring to in my previous post:

(B) Assess, levy and collect taxes for general or special purposes on all property, subjects or objects which may be lawfully taxed, and regulate the mode of assessment and collection of taxes and assessments not otherwise provided for, including establishment of a procedure for the withholding of approval of building application when taxes or water or sewer rates, charges or assessments imposed by the municipality are delinquent for the property for which an application was made;

....hope this helps clarify my previous comment.