Tax burdens and the rental car industry
I’ve got a hit in this morning’s USA Today on a topic I’m working on now—the growing use of excise taxes on rental cars to fund municipal projects with no obvious relationship to the rental car industry, including teachers’ salaries, opera houses, sports stadiums and free-lunch programs for seniors:
The normally fractious rental car industry is uniting to battle what it views as its common enemy: state and local governments intent on imposing more taxes and fees on renters.
Increasingly, governments are viewing taxes and fees on its cars as a primary option for local civic projects that the rental industry says should be funded locally: sports stadiums, art centers and convention centers.
“It’s taken on a wave of popularity,” says Richard Broome, a vice president at Hertz. “It’s politically expedient to tax out-of-towners because the presumption is that they don’t vote.”...
Rental car taxes unfairly single out one industry for a special tax, says Andrew Chamberlain of the Tax Foundation… in Washington, D.C. “And it’s not for the benefit of that industry.”
The industry has complained about it repeatedly in the past. But competitiveness and the lack of a trade group that lobbies have undermined past lobbying attempts, Chamberlain says. “They’ve done a poor job defending themselves,” he says. (Full piece here.)
You can make the case for local government spending on these programs. But it’s impossible to defend the practice of singling out one politically unpopular industry to bear the tax burden for them, when all local residents benefit. I’m hoping to finish a short paper on the subject by summer.
Posted by Andrew on Tuesday April 18, 2006 | Feedback?
