Byzantium
on the James
The
General Assembly is looking for ways to
separate taxpayers from their money. But Ken
Cuccinelli and Tom Rust have submitted bills that
could halt the deception and pilferage.
Ambrose
Bierce, an American journalist and short-story
writer who lived between 1842 and 1914, said
“No man's life, liberty or property is safe
while the Legislature is in session.” The
Virginia General Assembly went into session last
week, so taxpayers should hold onto to their
wallets.
A
lot of space has been devoted in some of these
columns about the great scam that was perpetrated
on taxpayers last year. Basically, the
Administration lowballed the tax revenues which
gave cover to Gov. Warner for proposing about a $1
billion tax increase. Not wanting to be outdone,
the liberal Senate Republicans saw his hand and
raised the ante.
Sen.
John Chichester’s, R-Fredericksburg, the
Chairman of the Senate Finance Committee, proposed
new taxes totaling about $4 billion—this was no
accident. Chichester
was working closely behind the scenes with the
Warner Administration. As reported in The
Washington Post on Jan.
14, 2004,
it is no coincidence that the chief architect of
Warner's tax plan, Finance Secretary John Bennett, previously
had
served as Chichester’s
right-hand man at Senate Finance.
By
proposing such an outrageous tax increase,
Chichester
single-handedly shifted the focus of the debate.
As the Senate and the (relatively) anti-tax House
wrangled over the size of the tax increase, the
Governor played the role of magnanimous referee
between the
left and right wings of the Republican Party.
In
the end, a biennial tax increase of about $1.4 billion was
enacted, the largest tax increase in the history
of our Commonwealth. Even before the ink was dry
on the new legislation, Bennett started to
revise the tax revenue projections upward. Today,
in a complete reversal the Treasury now estimates
a surplus of $1 billion. Yet we hear of no cries for Bennett’s
resignation, even though there is little doubt
that the revenue projections were intentionally
underestimated to justify the tax increase.
Given
the Byzantine machinations
that cross party lines, there is little hope that
taxpayers can ever get a
fair shake from a government that is bent on
deception and obfuscation of the facts. The only
way out of this predicament requires a dramatic
change in our paradigm.
Ergo,
Sen. Ken Cuccinelli’s Taxpayer Bill of Rights
(TABOR) bill. This is modeled after a very
successful legislation enacted in 1992 in the
State of
Colorado.
It basically limits the growth of State revenues
to inflation plus population. Once the limit is
exceeded, it automatically triggers a refund to
the taxpayers.
The
refunds given back to Colorado
taxpayers included three permanent tax cuts, two
income tax reductions of approximately $430
million in 1999 and 2000 as well as a sales tax
reduction of approximately $75 million in 2000.
Imagine
that: Tax rebates instead of tax increases! Budget
surpluses refunded to taxpayers instead of being
wasted on pet legislative projects.
Cuccinelli’s
bill (as of this writing it had not been assigned
a Bill No.) requires a constitutional amendment,
which won’t be easy to get through. Unless the
legislators hear vociferously from their
constituents, it is not likely that they will feel
compelled to support Cuccinelli’s bill, given
that it basically strips them of their authority
to raise taxes without limit.
Actually,
this is the second year that Cuccinelli is
submitting this legislation. His bill last year (SJ
33) was let to die in the Privileges and Elections
Committee, where four Republicans joined the
Democrats and voted to kill it. The Republicans
casting their vote with the Democrats were, J.
Brandon Bell, II, R-Roanoke; Charles Hawkins,
R-Chatham; Russ Potts, R-Winchester; and
Jeannemarie Devolites Davis, R-Vienna.
Apparently,
these Republicans don’t subscribe to the
Virginia Republican creed “that fiscal
responsibility and budgetary restraints must be
exercised at all levels of government.”
Nonetheless,
Sen. Cuccinelli remains undeterred and plans to
continue submitting similar legislation every
year. John
Taylor who heads the Virginia Institute for
Public Policy (also one of Bacon’s Rebellion wonks),
cites this bill as one of eight pieces of
legislation that are legitimate efforts to limit
the role, cost, and growth of government.
Another
bill deserving honorable mention is HB 2066
sponsored by Del.
Tom
Rust,
R-Herndon. This bill resurrects a proposal first
submitted in 2002 by former Del. Jack Rust, R-Fairfax
City.
It proposes to repeal the car tax reimbursement
program and replace it by dedicating 17.5 percent of the
state individual tax collections to the localities
(this pertains to existing, not new taxes).
Currently,
the state reimburses the local governments for the
tax car rebate that taxpayers have enjoyed since
1998. Abolishing the car tax was the campaign
promise that contributed to former Gov. Jim
Gilmore’s election. However, with cars getting
more expensive and new car registrations going
through a boom, the amount reimbursed to local
governments has increased year after year.
As
a result, the car tax reimbursements have become a
sticking point on many a budget negotiation. Last
year’s tax increase included a provision to cap
the reimbursements at about $900 million annually,
meaning that in future years taxpayers will have
to pick up the difference by paying higher car
taxes.
Rust’s
bill proposes to permanently exempt from taxation
all motor vehicles used for non-business purposes,
subject to a constitutional amendment that would
have to be ratified in the November 2006
elections. This bill finally delivers on the long
overdue promise of completely abolishing the car
tax.
In
addition to permanently eliminating the car tax,
this bill also serves another very important
purpose. Local governments complain that they are
at the mercy of economic cycles because their
major source of revenues consists of real estate
taxes. Therefore, during economic depressions they
face reduced revenues as property values decline.
Rust’s
bill should put an end to the cry for additional
sources of revenues for local government. By
receiving 17.5 percent of the income taxes collected by
the state, local governments will enjoy a revenue
source that was previously denied to them. In
short, the Rust proposal removes two serious
stumbling blocks in the budget process both at the
state and local levels.
These
bills are examples of legislative proposals that
could dispel Bierce’s contention that no one is
safe while the legislature is in session.
Unfortunately, they represent a minor percentage
of the more than 1,000 bills that have already
been proposed by our legislators in Richmond.
--
January 17, 2005
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