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.