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State of RI considering mileage based taxes December 5, 2008

Posted by truthspew in Uncategorized.
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This is very interesting. Check out this video story on ABC6.

The environmentalist in me says this would be a good thing, forcing people to seek alternatives like car pooling, public transit, etc. But the problem is the public transit system we have here in Rhode Island is a joke.

Our public transit carrier is the Rhode Island Public Transit Authority. Their funding comes from 2 cents of the gasoline tax. The gas tax in RI is 48 cents per gallon, 16 cents to the federal government, 32 cents to RI, or 2 cents to RIPTA, 30 cents to the general fund (aka the slush fund).

So what happened with the fuel price run up? Two things. People started finding ways to conserve gasoline which meant fewer gallons were sold. As a result both General Fund revenues dropped and so too did the funding of RIPTA. Additionally RIPTA saw its fuel contracts rise up to almost $4 per gallon. Lets see, shrinking revenue and rising expenses, not a very good prescription for a public transit system.

At the same time even though we kick 16 cents per gallon into the federal coffers, we get very little of that back in the form of highway funds. If you really want to know who won the U.S. Civil War look at who gets the greatest benefit from federal dollars. It’s the southern U.S. Sometimes I’m of the opinion that Lincoln should just have let them secede but I realize there was more at stake back then in an expanding U.S.

So of course we’re not getting appropriate federal funds, not with blowing trillions on Iraq. Those dollars could come back and finance infrastructure projects here in the U.S. But in the meantime the states suffer.

But the question begs, just what the fuck was the state of RI doing when the money was there to maintain these highways? Where did the money go. Sure just a bit under a billion went into moving I-195, but come on, DOT gets a pretty big bite of the state budget. I’d like to see a total forensic audit of DOT before any of these blue ribbon suggestions are implemented.

All one has to do is look at the re-construction of I-195. They didn’t even stick to the proscribed program to test the concrete that went into that highway. I guarantee five years from now we’ll be rebuilding portions of that highway. Maybe we need to end the corruption in the highway construction business, and more critically end the corruption in the unions in this state.

As an example of what it costs now to own a car in RI while living in the capitol city:

Say you have a $20,000 car. Sales tax is $1,400. The first year out that cars excise tax would be $1,500. So in the first year you’ll pay $2,900 or $241 a month for the privilege.

Lets say you drive that car 20,000 miles the first year. That means you’d kick an additional $100 in taxes. Lets suppose you get 30 miles to the gallon which means you’ll have burned 666 gallons, which means a total of $320 in taxes, of which $213.12 goes to the state of RI with the remainder going to the federal system. Per month that breaks down to $277.

So in the first year you’ll have paid $3,320 in taxes on a $20,000 vehicle, or fully 16%. In subsequent years that drops down a bit as the car depreciates so for the 2nd year assume the vehicle cost drops to $16,500. The excise tax would be $1237.50, and if adding mileage fees and fuel taxes it comes to $1657.50 or $138 a month.

That precipitous drop is because the sales tax wasn’t present. And it only gets cheaper as the years go by since the excise tax levels off to almost zero. By about the fifth year the per month taxation would be about $320.

So maybe the per mile fee isn’t such a bad idea. I don’t know, so long as we beef up our public transit options I wouldn’t be opposed to it.



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