A South Dakota legislative committee has recommended a substantial boost in taxes used to build and maintain state and local roads, but some lawmakers say the full Legislature will never pass such a large tax increase.
The panel voted 11-6 to pass a bill that would raise road taxes in two stages, with half the increase imposed next year and the other half in 2012.
The state gas tax would rise from 22 cents to 32 cents a gallon and the excise tax on vehicle sales would increase from 3 percent to 4 percent by 2012 to give the state an extra $75 million a year.
Annual vehicle registration fees would rise to give counties, cities and townships an additional $31 million.
While new taxes are never good, I still think that a gas tax and vehicle registration fees are the fairest way to pay for roads. Of course, I’m sure some legislators would prefer to pay for new roads by taxing food more.
It’s necessary. I agree with the rise in registration fees and car sales tax but do not agree with added gasoline tax. Gas tax is almost like a tax on food in that people in SD need their cars for work and provisions travel. Were there a good state wide public transportation system, then raise gas taxes. Also, higher pump prices would have a marked effect on this delicate economy. Here, registration and car sales taxes are nearly lowest nationally. A modest rise is justified. I bought an SUV in CA that I picked up in OR and drove to SD with a transport tag. I found what I was looking for at a great price and could save another $1,000 if I wiggled around state laws and licensed it here.
Gas taxes should be based upon a percentage of sales price – not a fixed amount. Allowing politicians to raise taxes that are based upon fixed amounts simply encourages them to do so while proclaiming the increase is justified because the taxes haven’t kept pace with inflation.
Raising taxes on automobiles will just be that much more incentive for people to keep driving what they have…meaning fewer cars will be sold. Think about it – if someone goes out and buys their shiny new Chinese H2 for $48,000 the 3% tax works out to be $1440. Raise that to 4% and you have $1920 or an increase of $480. I won’t speak for anyone else but that is a sizable amount if you ask me.
I realize in the scope of things this is only a 1% increase and I’m sure politicians will phrase it like that – but technically this is an increase of 33%, and that should scare everyone. When you have a tax based upon percentage – the state collects more revenue as more cars are sold. They also collect more as the average sales price goes up. So now all of the sudden they feel they need to raise that tax by 1/3rd? Why not tax cars at 3.25% or 3.5%… why the sudden desire to raise them all the way to 4%?
The fact is, this is just another ploy by lawmakers to pad their budgets rather than doing the responsible thing and reducing spending. They can claim the increase will go towards roads but we all know they will creatively find a way to weasel out of that too. Sure this increase money might go to a road fund, but they will just reduce the amount of money coming from somewhere else. The net result is the taxpayer getting the shaft yet again, and the politicians thinking new and higher taxes is a good idea during a recession.
Genius.
It might be a good thing for service shops however.
The problem was them trying to pay a fixed cost with a variable income stream. The more gas goes up in price, the less people drive. Fewer people driving as many miles means revenue goes down, which means taxes must be raised to make up for the shortfall, then people respond by driving less…
Meanwhile, the cost of road maintainence goes up with inflation and material costs every year.
While there should be a tax on gas to help offset the costs, the bulk of the revenue needs to come from somewhere else.
I think registration fees and excise tax is the best way. I disagree with Costner that people will buy fewer cars if the excise tax is increased, most people finance new vehicle purchases and taxes are usually included.