- The Washington Times - Sunday, February 4, 2001

To keep the promise that helped elect him governor, Jim Gilmore is going to have to withstand one final, furious assault from those out to revive the hated Virginia car tax. State Democrats, advocates for larger government programs, editorial writers, even Republican lawmakers beacons of minority-party politics that long guided the state GOP are demanding that the governor end the phaseout of the car tax on grounds that the state needs the money more than the people who earned it.

The phaseout began in 1998, with the elimination of any tax at all on the first $20,000 of a car or truck's estimated retail value. This provided substantial relief. However, with the average transaction price of a new car a model such as the Ford Taurus, for example approaching $22,000, according to the American Automobile Association, the effects of the remaining car tax are by no means inconsequential. The tax originally walloped Virginians with a levy of 4.5 percent of the total value of a vehicle which often resulted in a bill of several hundred dollars, and even $1,000 or more, each year. The average new car entailed a car tax bill of approximately $800 every year until depreciation ate away at the vehicle's value. But the phaseout is not complete and any person who owns a car or truck valued at more than $20,000 is still subject to tax as of today. For many people, the car tax continues to constitute a major hit to the wallet every year. After all, if your late model car or truck is valued at $28,000 the price of a well-equipped SUV you are still responsible for taxes on the $8,000 above the $20,000 cutoff. And 4.5 percent of $8,000 is not small change.

The car tax is hugely resented by Virginians, who rallied to Mr. Gilmore's banner during his gubernatorial run. Upon assuming office, Mr. Gilmore, unlike so many other politicians, actually delivered on his promise and a multiyear phaseout of the car tax was subsequently passed by the General Assembly. The remainder of the car tax on the value of a car or truck above $20,000 is scheduled for elimination in 2002 and it is on this final leg of the phaseout that Mr. Gilmore is encountering political resistance.

State Democratic lawmakers are now peddling treacle about the dire fate of the poor, "pregnancy prevention" services and the ubiquitous "children" should the car tax be completely repealed. Mr. Gilmore has proposed shifting some state funds from various entitlement programs and state services to compensate for the revenue shortfall engendered by the car tax phaseout. There is also opposition to Mr. Gilmore's proposal to use at least a portion of Virginia's $460 million share of the federal tobacco settlement to cover it. Lawmakers want to use these funds for other purposes. Tax relief for the people who finance all of those "other purposes" is, of course, the course of last resort when it comes to spending other people's money.

All bureaucracies complain at the prospect of any curtailment of their income. But the state bureaucracy does not have "needs" that outweigh the rights of the people who earned the money in the first place. The General Assembly should support Mr. Gilmore's pledge to ease the tax burden on Virginians as promised.

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