A perceived tax burden is often less about the amount owed than it is about matching one’s prior expectations. In the recent Sound Transit Motor Vehicle Excise Tax (MVET) controversy, relatively little has been made about the quantitative burden – people generally aren’t parsing dollars – but much has been made about rate fairness. Sound Transit’s use of a traditional depreciation schedule based on the Manufacturer’s Suggested Retail Price (MSRP) sufficiently differs from one’s everyday experience of their vehicle’s value that it feels like a punitive taking. But if ST3 had proposed raising the same amount of funds via a steeper depreciation schedule and a higher authorized rate, I am confident that the number of changed votes would have been negligible. People generally vote on the perceived merits of the projects in question, period.
Motor Vehicle Excise Taxes (MVET) have two strikes against them. First, their annual lump sum payments feel more viscerally punitive than property or sales taxes. Biannual property taxes are often embedded in rent or mortgage payments, and sales tax is a drip drip of a few dollars here and there. Second, using vehicles as a tax source intuitively feeds the War on Cars narrative, but it is little different than using gas taxes to pay for HOV/bus lanes. An excess of motor vehicles is a major reason for transit capital projects in the first place, and most of us who ride transit also own those cars. It is eminently fair to use one to help us transition to the other, and moving away from cars and toward transit is a spatial imperative if we are to continue to grow as a city.
My own car’s MVET cost $150 this year, and it admittedly was an unpleasant experience to pay it. But rationally I know that the total amount is fair, I voted yes with the majority, and that that’s the way democracy works. I also know that if I spend more than $8,500 this year on taxable goods, I will have contributed more in sales taxes this year than I did in MVET.
Sound Transit’s MVET is also surprisingly progressive. If through ‘defeasance’ we reverted to a 2006-era depreciation schedule, owners of cars less than 11 years old would see a tax cut and owners of cars greater than 11 years old would see a tax increase. So any populist uprising is a lot of smoke and mirrors. The dynamics nicely emulate the current healthcare debates in the other Washington. It may play well for legislators to stoke the fire, but reversion would be an effective tax cut for the rich, done in the name of the little guy.
Discussions floating around about a low-income MVET rebate are valid and promising, and Seattle provides the precedent with its $20 car tab rebate. The hit to ST’s revenue would not be severe, and those hardest hit by ST3’s taxes would get a welcome reprieve. But those of us who can pay should pay. Expensive vehicles are luxury goods that reflect our income status, and in a regressive state that already disproportionately taxes the poor, MVET is one of the most progressive sources available. It is progressive and fair for the Lexuses of Laurelhurst to pay more than the Toyotas of Tacoma.
UPDATE: Sen. Rebecca Saldaña (D – Seattle) introduced SB 5906 Tuesday night, which would allow a low-income rebate from Sound Transit’s portion of the MVET and property tax. It is the companion to HB 2148, by Rep. Kristine Reeves (D – Federal Way) that was introduced a couple weeks ago. Senators have the rest of today to sign onto SB 5906.