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Man
Cannot Live on
Tax
Policy Alone
Or
can he? Our fearless commentator gives it a try.
My
New Year’s resolution is to get a tax policy.
There are two reasons. First, from just looking at
the news it’s clear that everyone else in Virginia
has one. Many are introducing their policies in Richmond. I hate being left out. And second, from all the
state capitol hoopla, Virginians with tax policy
seem to be the key to both the world economy and
peace in our time. I always had thought state
taxes were just a small piece of the global
picture. Silly me.
Fortunately
for those of us who still marvel at Sim
City, Flight Simulator and other software, Gov. Mark
R. Warner has provided us both a plan and a Web
link [editor's note: the link is dead.] as starting points. The governor,
you’ll remember from his visit to your local
business group, starts by proposing to lower taxes
on cars, food and estates at inheritance time. He
suggests that income tax deductions and exemptions
be raised so Virginians with the lowest incomes
stop paying income tax and he adds another tax
bracket on top -– 6.25 percent -- so Virginians
with the highest incomes pay a little more. And he
adds a penny to the sales tax and raises the tax
on cigarettes.
What
his website lets me do is log on and see for
myself exactly how all these changes taken
together might affect me. You can do the same.
Just plug your Virginia taxable income from your
state tax return into the Web form, enter a few
answers to questions – number of dependents,
number of cars, locality, whether you smoke, eat
food, etc. – and your estimated taxes under the
tax plan begin to emerge.
For
example, because you will be able to exempt more
income from taxation, your income tax may go down.
But if the highest tax rate goes up, you might pay
more. Unless you eat a lot more food, your food
tax for the year will go down. And that local
property tax on your cars, if fully phased out,
means more savings. That penny will mean more
sales tax paid, but is a penny really serious when
they are given away every day in those “Give a
Penny, Take a Penny” trays by cash registers
everywhere? Maybe the Department of Taxation will
have one of those big trays in their lobby.
Okay.
the numbers go in and, shoot, it looks like I
might have to pay $138 more. How did that happen?
That puts me in the minority of Virginia
households who pay more under this tax plan. Does
that make me a minority taxpayer? I was hoping to
join the majority and enjoy maybe $138 in tax
savings. Then I could invest in something
important, such as building a new NASCAR track in
Northern Virginia
to unite our state or finally securing my
retirement once and for all.
But
no, there are the figures, cold and hard – pay
$68 less in taxes on food and $128 less in car
taxes, thank you, but pay $135 more in income
taxes and $199 more in sales taxes. Geez, that’s
more than $11 more a month I’m going in owe Virginia
government. Probably $5 of that goes to public
schools, $2 to Medicaid, $2 to transportation and
a buck each to the state police and universities.
Who needs that stuff and what next, giving key
faculty pay raises?
Now
you see why I need a tax policy. Some tax payments
are going up, some are going down. I’ll probably
have to pay even more taxes under other plans that
raise the gasoline tax and add two income tax
brackets. Then there is the plan for Virginia
to abolish the income tax and raise the sales tax
to nine cents. How do I figure this out if, as so
many seem to hold, paying taxes is a fate worse
than death, even tax-free death?
Of
course, the governor’s Web form! Just plug
different numbers into the Web form. What if my
wife and I have twins in 2004? Wow, net
reductions. We better get to work. Thank goodness
for those “Do Not Call after 9:00 p.m.” rules for telemarketers. Next, what if we
bought two more cars so we had four for the two of
us? Great! We live in Fairfax
County so that is cha-ching, cha-ching, big time tax
savings.
We
buy more gourmet foods, eat more and, voila, food
tax savings are now up near $100. Oh, and did I
mention already getting both kids finished with
Virginia universities before the 50 percent
increases in tuition kicked in in 2003! Now I’m
making out like a bandit. No plans to die this
year, so don’t care about the estate tax. I
don’t smoke, that’s gravy. But wait, what if
by paying more cigarette tax now I’m making a
down-payment on Medicaid I might need later since
I now am smoking and overeating? Anyway, with
these few minor changes, Virginia
is beginning to owe me the big bucks. Living by
tax policy alone doesn’t really require many
changes in my life. No wonder those anti-taxers
always are so happy and carefree when they appear
in public.
But
wait, I forgot the sales tax due on those two new
cars. I’m making more money this year, too, so
the income tax goes up. Maybe shopping on the
Internet might help, but then I don’t get the
break on the food tax in
Virginia
if I don’t buy the groceries here. Plus half the
Internet sites I shopped this year collected sales
taxes anyway. Was it for Virginia
or for another state? Can I deduct that? And why
doesn’t Virginia
tax services? Then I could save some money by not
getting haircuts so often and by leaving my stuff
at the dry cleaners until 2005. Every weekend I
couldn’t play golf would save me taxes, if we
had a tax on 18 holes.
This
keeps getting more complex, but deep down, I
really want to move beyond just having a tax
policy. I want to get into one of those special
taxing districts. Who wouldn’t? Maybe there’s
a Jumanji.tax Website somewhere with guidance.
--
January
5, 2004
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