ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, December 7, 1996 TAG: 9612090009
SECTION: EDITORIAL PAGE: A-9 EDITION: METRO
THE TANGIBLE personal-property tax, imposed by Virginia cities and counties, is regarded by many as a nuisance. Unfair, too - since it taxes possession of movable items, mostly cars and trucks, for which the owner has already paid a hefty sales tax upon the hefty-price purchase. (The owner pays taxes, as well, on fuel to keep the item movable, and for building and maintaining the roads on which the item moves.)
So, get rid of the dratted tax? State Sen. Charles Colgan of Prince William County, who wants to do just that, might have a better argument if he could figure out a fairer and less obnoxious way to produce the $1 billion-plus a year that the personal-property levy provides for local governments. In 1995, for instance, the tax accounted for $15 million of Roanoke city's revenues, $15 million in Roanoke County, and $5 million in Montgomery County. Faced with increasing costs of services and diminishing federal aid, localities need these revenues.
But Colgan's idea for replacing this revenue source - the second-largest local source, exceeded only by real-property tax - is not fairer or less onerous. He proposes raising the sales tax from 4.5 percent to 6 percent and extending the sales tax to several services that are now exempt.
That wouldn't be such a bummer of an idea either, if - but only if - the General Assembly would repeal the sales tax on food (and make up for that revenue loss somewhere else). Absent that reform, Colgan's proposal would in effect raise taxes on poorer Virginians to offset a repeal of taxes for better-off Virginians.
Of course, not only the wealthy own cars and trucks and pay personal-property taxes. They are, however, more likely to own more expensive vehicles, and thus pay more than those who own second- and third-hand jalopies. The personal-property tax assessment is based on fair-market value.
Wealthier individuals, along with low-income and middle-class Virginians, would of course be paying more in sales taxes on food and other items and services to offset repeal of the personal-property tax. But it doesn't come out even-steven, because the food tax is highly regressive: It takes a disproportionate share of the poor's income.
Hard as it may be for some to believe, cars - unlike food - are not a necessity. Some low-income families don't have cars. With a portion of the state's sales-tax revenue earmarked for roads, these families already are contributing to car owners' well-being when they buy food. They should not be asked to pay higher food taxes so car ownership is less expensive for others.
Colgan's intent - to end the personal-property tax - might be admired by many Virginians. Moreover, because the tax has 24 general classes, each of which may be valued differently, it's not the easiest to administer. Along with vehicle owners, some cities and counties might be happy to be done with the blamed thing - assuming its elimination doesn't result in a revenue loss.
All this is, nonetheless, a regressive distraction. The real lemon that needs scrap-piling is the food tax.
LENGTH: Medium: 56 linesby CNB