Green Room

Cash For Clunkers Rear Ends Rhode Islanders

posted at 10:48 am on July 3, 2010 by

Last summer’s Cash for Clunkers program artificially boosted used car prices by requiring destruction of the clunkers, thereby restricting the supply of used cars.

That was bad enough for people looking to buy used cars.

But the market distortion caused by government intervention is hitting Rhode Islanders particularly hard.

Rhode Island taxes the value of automobiles (yeah, welcome to our nightmare). The value of the automobile for tax purposes is based on the fair market value at December 31 of the preceding calendar year.

So Rhode Islanders are being taxed this year based on the inflated value of used cars last year primarily as a result of the Cash for Clunkers program.

But it gets worse. Rhode Island used to exempt the first $6,000 of value, but in a revenue raising measure, is allowing municipalities to lower the exemption to $500.

The result is a nasty tax bite for Rhode Islanders who own used cars, as detailed in The Providence Journal:

If you own a car in Rhode Island, be prepared for a shock when you look at your property tax bill….

“My own vehicle went up,” said Linda L. Cwiek, chairwoman of the state Vehicle Value Commission, which sets uniform values for tax assessors statewide. She drives a 2007 Jeep Grand Cherokee.

Rhode Island sets the value of vehicles registered in the state based on used car prices at the end of December of the preceding year. Taxes are then calculated as a percentage of that value. That means Rhode Islanders’ car taxes are affected by the used-car market.

“There are less used vehicles out there for people to buy,” said Cwiek, who also is the tax assessor in North Kingstown.

She placed blame for the short supply of used cars on the federal “Cash-for-Clunkers” program.

To stimulate a sagging automotive economy and to aid the environment, the federal program offered financial incentives to turn in older vehicles in favor of buying more fuel-efficient models.

In all, the program removed 677,842 vehicles from the road and sent them to the shredder. That prevented them from entering the used-car market.

They never learn, do they? If you liked Cash for Clunkers, you’ll love Obamacare.

Cross-posted with updates at Legal Insurrection Blog

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Poor little Rhody–taxed to death,welfared to death, unioned to death, unemployed to death: “they’ve been down so long it looks like up to them”.(quote from someone, I forget who). Never the less, I love them and wish them well and feel their pain as more government manipulation comes down especially hard on them as usual,unwitting martyrs to the liberal movement. Hang in there RI.

jeanie on July 3, 2010 at 11:11 AM

Clearly you need to get some special financial assistance from Obama. (I understand this is also known as “Obama money.”) He and the Democrats are going to give po’ folks special subsidies when their utility rates and health insurance rates necessarily skyrocket. Why not when their vehicle tax rates soar?

Go get you some of that Obama money, shipmates.

J.E. Dyer on July 3, 2010 at 11:21 AM

I’ll bet that obama money is already pouring it supporting and uplifting the very large(percentage wise)welfare population in that state. To their credit however, they are trying to cut expenses but near as I can tell from my reading it is at the expense of the middle class and business. Never from the bloated State payroll, pension fund or the pockets of their slippery, largly Democrat political class.

jeanie on July 3, 2010 at 11:52 AM

Sounds like a really good reason to leave.

tarpon on July 3, 2010 at 1:04 PM

So Rhode Islanders are being taxed this year based on the inflated value of used cars last year primarily as a result of the Cash for Clunkers program.

Now, if Rhoders were to buy brand new Government Motors cars….

percysunshine on July 3, 2010 at 1:45 PM

You mean they tax the value of your car and make you buy a tag as well? Isn’t that double taxation? Hey, RI, you were supposed to go out and buy a new green car. Get with the program.

Kissmygrits on July 3, 2010 at 2:33 PM

You mean they tax the value of your car and make you buy a tag as well? Isn’t that double taxation?

Oh, it’s MUCH better than that. You have to pay property tax on your home, and on your vehicles; you have to pay sales tax on your purchases (food, clothes, etc.); you have to pay a state income tax on your income, in addition to the Federal Income Tax; then there’s the tax on gas; and this is just for the STATE. You pay sales tax when you buy a vehicle, then you pay a “privilege tax” to continue to own it, while also paying to keep it registered, insured and maintained…. The more blue the state, the lower the quality of life – when will Libtards learn???

KMC1 on July 4, 2010 at 1:38 AM

You get the government you vote for. Have fun with that!

beatcanvas on July 4, 2010 at 9:56 AM