The fixation with how many luxury cars are registered in Greenwich is annoying. Somehow, the discussion about eliminating the car tax always turns to Greenwich, and how rich people will get a bigger tax break than any one else if the car tax was eliminated. This is such a silly argument. With a mil rate of 7.5, Greenwich car owners barely pay a car tax to begin with. Let’s look at the list of registered “luxury” cars in Greenwich courtesy of today’s Courant article:
3,769 BMWs
3,474 Mercedes-Benzes
931 Porsches
94 Ferraris
90 Bentleys
65 Aston Martins
40 Maseratis
39 Rolls-Royces
First I scoff at lumping the BMWs and Mercedes in this list, because a car make is not always the best way to determine a “luxury” status. Many Mercedes sedans can be had for $30k. Many Lexus sedans can be had for $50k. A GM SUV will cost more than many BMWs. But the list was created because the author, Christopher Keating, wants to paint a picture. And that picture is of rich people owning and driving multiple cars in tony Greenwich, which he does by mentioning Diana Ross and Tommy Hilfiger.
Of course who cares what rich people do in their cars, unless your are talking about L.A. And speaking of California, they do have a car tax, but it’s assessed by the DMV and is uniform throughout the state. Meaning the Honda Accord in 90210 pays the same tax as the Honda Accord in 92284. And that’s the problem with Connecticut’s car tax in the first place. A Honda Accord with a $30k assessed value would cost $225 in car taxes. That same vehicle in Norwalk (23.238 mils) would be $697.14. If you live in Bridgeport that will be $1209.60 (40.32 mils).
Is it any wonder that Bridgeport struggles to develop small business job growth, when it is cheaper for your local, say plumbing outfit, to base their office out of Shelton (23.59 mils)? And plumbers, electtricians, general contractors, and even pizza parlors all tend to require multiple cars or trucks to do business.
Economic impact should be the chief concern of our legislature. On the one hand they decry the high cost of living in the state, and call for actions to stop the flow of young people from the state. Yet, here’s an opportunity to reduce a tax that unfairly targets people who choose to live in the more affordable areas of Connecticut. Connecticut, without event calculating the local taxes, according to Kiplinger, already ranks in the bottom tier of states for costs associated with operating a car. 38th if it’s a Camry according to this article. I’ve linked to the Excel Spread Sheet here: Car Taxes 50 States.
Local municipalities fear that the state won’t reimburse them for the loss of the car tax revenue, which currently is collected by the municipality, not the state. Yet, from the resident standpoint, the mechanism for collecting the tax is clunky and inefficient. If there’s going to be a car tax, make it fair, make it uniform and make it easy to pay. Paying the tax at the point of registration would be a step in the right direction.
But in the end, if Connecticut wants to stay competitive with a state like Oregon, it will need to streamline its archaic 169 forms of government and taxation and start delivering streamlined government operations.
source: Courant , Fancy Cars, Taxing Debate, by Christopher Keating, March 18, 2007
source: Kiplinger, Tax-Friendly Places to Buy a Car, By Mark Solheim, April 7, 2006

