In a stunning reversal of policy, the City of Concord, after punishing the city’s auto dealerships by imposing a higher local sales tax, now wants to change course. Concord Mayor Ron Leone is now saying: “There’s a vision to get our [Concord's] auto district on the map” (Contra Costa Times, Dec. 1). The mayor wants to make Concord a center for vehicle purchases. But how?
Why isn’t Concord’s auto district already on the map? The answer, in all likelihood, is that Concord’s City Council, in July 2010, made a HUGE MISTAKE with its flawed Measure Q sales tax ballot measure. The referendum asked voters to raise the city’s sales tax from 8.25 percent to 8.75 percent. Mistakenly, the voters complied.
In 2010, the sales tax on a $40,000 car was $3,300. In 2013, when Concord’s sales tax will rise to 9.0 percent, a $40,000 car will carry a sales tax of $3,600 — a $300 increase.
There is a simple law of economics: the more something costs, the less people buy.
If Mayor Leone and city council really want to promote car sales in Concord, he should lead an effort to lower Concord’s sales tax, not increase it.