Hammer Time: The Next Flat Tax

Steven Lang
by Steven Lang

I hate politics. Neither side of the extremes can do math and everyone in between ends up paying for it all. I don’t care if you’re a Rep, Dem, Lib, Con, Tea, or the apathetic majority. Putting faith in political solutions when it comes to money is never worth the effort. With that said, my home state of Georgia is money crunched. They see an asset worthy of their financial portfolio and yes, it is the automobile.

Georgia and New Hampshire are the only two states that don’t collect a tax for ‘individual to individual’ transactions. You buy a Camry for ten grand in Atlanta from a fellow down the street? That’s all you pay for now. Get one from the dealer down the street? It’s more. An extra $600 to $800 (6% to 8%) depending on your county’s sales tax rate. Does that put the dealer at a disadvantage? Yes, but that’s not close to the whole story.

The big issue for most dealers is not the one time ‘individual to individual’ transaction. But the ‘curbstoner’. When you drive down the road and see the same corner spots hawking vehicles for sale, that’s curbstoning. Individuals who buy vehicles at public auctions or privately and then try to find whatever well traveled space is available to sell it on the cheap.

Officially you are supposed to sell no more than five vehicles a year as an individual in Georgia before you have to get a dealer’s license. Most states have the same policy, and it’s never cheap. The running cost of a dealer’s license in Georgia when you throw in an office, insurance, a surety bond, and other associated costs is usually at least ten grand. That’s serious money for most folks and not too surprisingly, most small-timer’s want to avoid it. However when ten cars turns to twenty, which turns to fifty… the laws of unintended consequences tend to go haywire. You end up with a cottage industry where cars by the thousands every week are sold this way tax free.

The car that blew up down the road gets bought on the cheap, minimally fixed up, and re-sold on the same side of the road. Used tire stores buy wrecks that are then fixed up with minimal safety standards and get ‘for sale’ signs on their windshields. All of it is under the table. Before you think I’m exaggerating here, I have both versions of this within five miles of my dealership. As the guy who is stuck paying for the ‘free riders’ and dealing with the rep these folks give to my work, it ticks me off.

So now we have another “Major Tax Reform Bill” at our state’s Capitol. It is House Bill 387 and it will raise about $300 million in taxes if it’s passed. A flat sales tax that would level out the playing field when it comes to purchasing a vehicle and it will help close yet another record deficit . But many of the folks in Georgia who buy their vehicles privately will end up paying more. Is it fair?

I don’t know. I realize that this automotive version of a fair tax capitalizes on John Q. Public. But I also know that you can’t have all the benefits of a stable democratic government without paying for the cost of it. Right now we’re about $13 trillion plus from that reality. To me the ‘income’ side of taxation is always up for debate. The ‘goods and services’ side? Not so much. I think a fair and flat tax on that end is reasonable. I think it should pass.

Does supporting this bill make me the bad guy? Obviously I am the ‘special interest’ in this case. But am I right? And if I’m not right… who else is wrong?

Steven Lang
Steven Lang

More by Steven Lang

Comments
Join the conversation
2 of 58 comments
  • Steve65 Steve65 on Mar 30, 2011

    Gotta pay for the roads somehow, and a vehicle tax seems as reasonable a way to do it as any other. I'd do it based on weight or axle loading, but that's just me. Here in California, you're technically required to pay "use tax" (aka sales tax) on ANY private party sale - not just vehicles. But aside from houses and cars, not many of the things that change hands privately are worth the effort for the state to persue collection. So it never gets paid, and most people aren't even aware they're supposed to pay it.

  • Zeus01 Zeus01 on Mar 30, 2011
    Progressive/regressive taxation is a myth. ALL taxes will hit the lower-income people harder. You can’t “tax the rich” because the rich have the option of simply not playing once you raise the stakes high enough. I can guarantee you this is done, I played fly-on-the-wall to many such discussions come December 2008. But it sure plays well shouted from a bullhorn on a vote-buying tour, doesn’t it? Absolutely true. The problem is that too many socialist-minded folks think that if the rich had less, somehow the rest of us would have more. It's not fair that those rich movers and shakers of society (who provide goods, services and JOBS to the rest of us) can simply pick up their ball and go play elsewhere (like in China for example) if taxes become too stringent for them here. It's not fair that various levels of government provide tax incentives (bribery using tax dollars generated by the public?) to local and multi-national corporations to "please stay, don't leave and kill our economy!" It's not fair that the feds instead impose the full brunt of the taxation laws on those who do not have the financial wheretofore to leave. But they do. Deal with it! Start a business, using the same tax breaks that other business owners use. Or sell your house, cars, investments and any other assets you may have, pull up stakes and move to Costa Rica. Or Equador, Lake Chapala, Mexico, Panama..... And reinvest in rental properties there using money from the sale of your house. And renounce your citizenship back home to escape the income tax the feds will likely try to collect from you if you don't. Like it or not, both the US and Canada were built on a system of free enterprise. As unfair as it may sometimes be (and an absolute bee under the bonnets of those envy-driven souls who simply can't bear to see others do better than them), it still kicks the living crap out of any socialist equal-sharing-of-misery system that would have us all riding bicycles, taking mass transit, living and working five minutes from home and paying obscenely high rents for living in a state-owned apartment.
  • Ajla If I was Ford I would just troll Stellantis at all times.
  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
Next