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The Economic Progress Institute is a nonpartisan research and policy organization dedicated to improving the economic well-being of low- and modest-income Rhode Islanders. For more information, visit www.economicprogressri.org

8 responses to “Understanding Rhode Island’s Motor Vehicle Tax”

  1. Barry Schiller

    So glad the Economic Progress Institute is looking at this as it needs examining. The prevailing wisdom on this, which is to prioritize ending this tax, in effect pandering to motorists with expensive cars, is mostly unchallenged except for a few transit advocates who see a car tax elimination as a vast subsidy to driving which adds to greenhouse gases, sprawl, deters walking, biking and transit use, and hurts urban quality of life.
    I think the reason the car tax is considered “regressive” is likely mostly because motorists who don’t want to pay the tax like to use that word to discredit it, as Mattiello does. It is actually more a tax on actual wealth.
    It should be noted that municipalities spend a lot of money maintaining, lighting, patrolling local roads, and after storms, removing snow from roads (but not from sidewalks)
    It is worth considering reforming the tax by considering a statewide car tax rate, and raising the minimum $500 exemption to something considerably higher so that those with older less valuable cars can mostly avoid the tax.

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  2. Merit Guy

    How to make car tax disappear: Move to Florida. It also eliminates state income tax and cuts real estate property taxes about in half. Interestingly, the roads and bridges are in great shape, crime is much lower, and people don’t give you the finger when you’re out driving around.

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    1. transportprovidence

      They don’t give you the finger in Florida, they just kill you with their car. 8 of 10 top pedestrian-death cities are in Florida.

      I can’t speak for crime overall in Florida, but RI has the lowest gun violence in the nation. I think it’s unrelated to taxes, but it does show how off-base you are, factually.

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  3. Nesi’s Notes: April 8 | WPRI 12 Eyewitness News

    […] 13. Also worth a read: the Economic Progress Institute, a local liberal think tank, has a deep dive on who benefits from repealing the car tax. […]

  4. transportprovidence

    This is a great explainer which could only be improved further if it explained how much driving is subsidized to begin with, and how expensive transit is. I see some snide comments online from time to time about how those who pay tax should be those that get tax cuts, but since non-drivers pay a lot of road costs through general taxation, they are actually the over-taxed group. RIPTA also costs more than what many drivers pay in car tax. That needs to be understood as part of the discussion.

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  5. Yes, the car tax is very regressive

    […] Doug Hall of the Economic Progress Institute attempted to put some meat on the bones in a technical piece in RI Future estimating the average tax someone in each income bracket pays. (In order to run his calculations […]

  6. No, lowering the car tax is what’s regressive.

    […] Progress RI, which studied the car tax, found that the lowest quintile of Rhode Islanders would receive $27 from Gov. Raimondo’s car tax […]

  7. cailin rua

    I don’t think lowering the car tax is a good idea. This seems a complicated subject and several egos have weighed in. Like most people, I don’t have the time to study, in depth, all the analyses offered but it seems to me one of the big problems re: road and highway upkeep has been the difficulty involved with raising the gasoline tax to keep up with things like the effects of car mileage efficiency.

    I think the car tax should be uniform across the state and a person’s contribution should be based on income and which should be part of the ultimate equation, along with more realistic assessments of car value. I think the tax should be dedicated to road maintenance, primarily, and to transportation, exclusively. I think a car tax or a gasoline tax are both a far more preferable way to finance road maintenance projects than tolling. Current state of the art tolling technology leaves too much open to state surveillance of people moving through the jurisdictions where tolling is taking place. It also opens the door to the corrupting influence of corporations who would like as large a piece of the potential cash flows involved as they can grab.

    As far as Gerald Ford era John Chafee Republican styled Earned Income Tax Credits as rewards for using transit, how would that work? Would someone get a credit just because they don’t own a car? That doesn’t seem right. What James Kennedy has laid out is complicated and overlooks all the other costs involved in car ownership, which, unless one is well heeled enough and established as a downtown professional, are usually costs incurred involuntarily,

    I don’t think I would be against an added surcharge for mass transit, either. As far as adding dedicated bike lanes is concerned, I think that is a developer’s dream that can be played several different ways and that the developers, If they want those, should kick in plenty for them and mass transit, as well as people who for one reason or another find it necessary to drive autos. People should understand that road calming strategies and the like have been used to create traffic patterns that will play into the hands of those who want to divert traffic toward routes where motorists will be required to pay tolls on roads private entities would like to privatize for themselves to garner the cash flow possibilities created by such strategies. Those same strategies are also use to exclude.

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