Assembly's car transaction fee a clunker

April 20, 2011

Marylanders should thank The Sun for revealing the General Assembly's deficient thought process to increase tax revenue by redefining costs for buying cars ("Budget strikes a few deals for some," April 18). Unfortunately, our representatives use methods such as the increase in administrative fees for Marylanders buying cars from state dealers.

Here's the Assembly's thinking: "Let's double the allowable administrative costs dealers charge next year and the year after increase it by another $100. That added $100 million in the cost of cars times the 6 percent sales tax means another $6 million in revenue to balance our 2012 budget."

Have these folks ever bought a car? The price is negotiable and, since the sales price can stay the same as a result of the negotiations, the Assembly's plan for more revenue falls apart. Since the sales price remains the same, no additional sales tax revenue occurs. But it's worse than that for Marylanders; we pay the increased costs to the dealers who then take the new, bigger cut out of the sales price. Consequently, both Maryland buyers and the state lose out on this attempted revenue enhancement.

How can Maryland voters get a seat at the last minute budget reconciliation meetings? How many other smoke and mirrors revenue enhancements are in our budget?

Charles Herr, Perry Hall

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