Sunday, December 21, 2008

Pennsylvania's Motor Vehicle Sales Tax Problem

A story that appeared in Sunday's edition of the (Sub-)Standard Speaker highlights the tax consequences of the auto industry's plight. Pennsylvania's motor vehicle sales tax revenue is down 25% when compared for November 2008 over November 2007.

The data supplied by the state Revenue Department shows the motor vehicle sales tax revenue is down $60 million year to date which represents a 12% drop. Two reasons are cited in the story- difficulty in securing financing(credit scores of at least 700 I am told by my friend at Tom Hesser Nissan) and those who do purchase buying lower priced and smaller cars to keep pace with the high price of gasoline.

Total sales tax from non-motor vehicle categories are $9 million less than last year. It is going to be hard for Fast Eddie Rendell to convince the electorate there is extra money for his electrical spike and healthcare for the uninsured initiatives.

I am going to take the liberty to post in its entirety a letter to the editor that appeared in today's Morning Call. It highlights consumer sentiment that prevails today.

What's an 'American car,' anyway?
December 21, 2008
A Dec. 14 letter, ''Buying 'American' helps the U.S.'' encouraged us to buy American cars. In 1991, I bought my first new car, a Ford Escort. American? Well, it was actually assembled in Mexico.

In 1999, I tried again to buy American, this time a Ford Windstar. Strike two: It was assembled in Canada. Next up was a Chrysler Town and Country. It was also assembled in Canada.

With my most recent car purchase, I was determined to buy an American-made car, and I finally succeeded: A Toyota Camry, assembled in Georgetown, Kentucky.

Will someone please tell me what constitutes an ''American'' car?

Alan Earnshaw



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