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Not a bad idea, really

20 November 2016

One assumes that with Morena and PRD in control of the district assembly, this will probably be shot down, but it seems perfectly reasonable to me. (My translation from NOTIMEX):

jamThe PAN faction in the Federal District Assembly (ALDF, for its initials in Spanish) has proposed retiring the “tenencia” (property tax) on  private vehicles, including those that cost more than 250 thousand pesos, that is, the so-called luxury cars.

In place of the tenencia, Local deputy Andrés Atayde Rubiolo suggests taxing private autos on the bases of two factors:  the amount of contaminants per unit, and yearly mileage.

This would be a proportional tax, with a rising rate:  those who use their cars more, and who pollute more, would pay a higher tax.  y.

Atayde added that the tax would be “corrective”, in that it compensates for the damage in the city caused by excessive use of private vehicles, said to be the largest contributor to pollution, as well as an incentive to reduce the use of private autos.

The chairman of the ALDF Finance Committee clarified that the tax would not be on cumulative mileage on the auto, but on mileage during the corresponding year.  That is, a car that has been in use for several years would not be taxed at a different rate than a new car with very low initial mileage.

The National Action Party (PAN) believes that putting a tax on the savings or investment of the city’s families distorts consumption, savings, and investment in the medium and long terms, Ayayde Rubiolo added, calling the tenencia a “distortion” in that ownership of an automobile was a investment.

Atayde Rubiolo also reported that according to his data, 50 percent of the tenencia in the capital comes from middle class and lower middle class taxpayers.

indexHe stated that the intention of the proposal is that families who, with effort and savings buy a car for mobility, will no longer pay this tax.  However, luxury and larger autos, which tend to pollute more, would pay a higher tax rate.

The proposal, as presented, would earmark revenue from the new tax primarily to the Fondo de Movilidad (“Mobility Fund), given that currently seven out of every 10 trips in the Federal District are made by public transport.

The Fondo de Movilidad presently spends seventy percent of its budget on roads for cars, and only thirty percent on pedestrian and cycling infrastructure.

While I think any proposal that encourages people to drive less (and stop hogging the road with large luxury vehicles) is worth considering, a few possible suggestions might be to give a lower annual mileage rate for electric or flex fuel autos; ignore the expected demands from luxury car services (like Über and the like); use some of the “Mobility Fund” for low-cost loans for buying more energy efficient taxis and alternative fuel autos; and earmarking a higher percentage of the fund to pedestrian and bicycle transportation needs.

Thoughts?

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