Rebel With a Cause

Paul Goldman


Liar's Poker


Let's be honest: The culture of Wall Street, as chronicled in the best selling book Liar's Poker, now dominates politics in Virginia.


Trust is a five-letter word that turns into "rust" when you play with the T - as in Taxes - by breaking your promises. This has been the premise of all my writings on the budget issue, whether praising the Governor/Chichester/Howell/Callahan, et. al or criticizing them, as the case may be.

Right now, we have a new kind of politics in Virginia, based on the ends justifying the means. In mathematical parlance, it is Liar's Poker, stealing the title from the book about the culture of Wall Street. A proposal that would effectively double the car tax over the next few years indicates that Virginia politics has embraced the philosophy that "the ends justifies the means."

Over the last few years, no one has written more than I have about the fiscal irresponsibility -- the aggregate fiscal drag on the state budget -- of the car tax program enacted in 1998 by the votes of the very politicians now decrying their handiwork. Earlier this year, I pointed out in the Washington Post - and was attacked publicly for it -- of the long-term folly of the governor and the State Senate budgets premised on 100 percent repeal of the car tax when they knew this would bust the budget without also raising billions in other taxes to pay for it. 

I was called, in effect, a liar, about my analysis in the Washington Post article entitled "Car Tax Cop Out." 
But as Dr. King said, truth crushed to earth will rise. So as always, I never took the personal attacks seriously and figured the analysis would carry the day. 
Gov. Mark R. Warner, the state Senate and others have dropped their budget-busting proposals of quick or immediate 100 percent repeal. 

Good for them. Now, they actually want to go in the opposite direction, and begin to raise, not lower, the current car tax burden on citizens. They would do this under the guise of capping how much money the state will send back to localities for repealing that hated local levy. In theory, this would not require any locality to raise the local car tax burden on its citizens. But either the car tax will up, or property taxes will go up. 

In effect, their car tax cap is really a way to increase property taxes. This is a curious result when you consider they are selling the new sales tax increase as a way to hold property taxes down. 

As I teach my son: What a web we weave when we.....[he can finish it himself as can you]. 

Still, you are probably saying to yourself: Okay Paul, you should feel good, they have seen the fiscal light, they have rejected raising sales taxes to pay for repeal of the car tax, and if you were an elected politician, the press would be saying you won. But the issue is not about winning a point, or raising taxes a little or a lot, not about spinning your image: but rather about whether the issue of TRUST will now turn into a RUSTED shell. 

Why? Because this new car tax "cure" is worse than the disease, if you believe that the ends do not justify the means, if you believe the issue of TRUST - keeping your campaign promises -- is the most fundamental to our election process. 

In Vietnam, there was this famous quote: We had to destroy the village to save it. In Richmond, our politicians are telling us: We had to play Liar's Poker with the people in order to save them from their own selfishness of not wanting to do what was right for Virginia. So, they ran on platforms promising not to raise taxes and to enact the 100 percent repeal of the car tax. 

Now, they want to be seen as profiles in courage for being dishonest with the public.

Not all of them. There are those like Senators R. Edward Houck, D-Spotsylvania, and J. Brandon Bell II, R-Roanoke, who did the honorable thing and campaigned on repealing the car tax repeal. Some of others, too, said they were going to raise some taxes and repeal others. But the overwhelming majority -- and surely all the key players -- purposely hid their true intentions from the public in order to get elected. 

So to me, the issue is not taxes, but trust
Those breaking their No Tax pledges say the cost in less trust is made up by the billions in new taxes. 
But is it? The test of your principles is always the hard case, never the easy case. 

Take the car tax. The public was promised in the elections of 1997 and 2001 the 100 percent elimination of the car tax on the first $20,000 of assessed valuation. This was reaffirmed in 2002 and 2003. The budget proposals made by the governor, and the state Senate in 2004 were likewise premised on keeping this promise as would of course be the case. 

As I wrote at the time, it was folly to keep a promise by breaking another promise, the promise not to raise taxes.

For sure, budget negotiations require some give and take. However, the new proposal to cap the amount of car tax money going back to citizens means that within five years or so, the average Virginian would see his or her car tax bill double. Thus, the ends justify the means.


The issue has long since shifted from taxes to trust. Move over Main Street, for the culture of Wall Street now dominates Virginia.


We Democrats have a recent example of the risk vs. reward ratio of lies vs. the truth. "I have never had sexual relations with that woman" said President Bill Clinton. Supporters and detractors said he was either lying or telling the literal truth depending on your definition of sexual relations. Technically - and we have all been through this at some point -- it was or it wasn't depending on what dictionary you consulted.


Regardless, had Bill Clinton been willing to accept a Censure from Congress -- the whole impeachment thing was an insult to our constitutional democracy -- Al Gore would have won the presidential election. Given the results, I am certain a majority of Democrats would, in hindsight, have told Clinton to take the Censure and ask the country to forgive him.

So, here in Virginia, we have moved from lies about sex to lies about taxes. What will happen when Virginians face the fact that the politicians in Richmond have decided that they believe it is okay to promise the public anything to get elected because that is a necessary evil in order to get the power to govern? 

In the long run, raising the sales tax or capping the car tax are only issues of the moment, with those against and those in favor each having the 51 votes to prevail at different times. 

But trusting the people, and keeping your campaign promises, define our basic political character, the fundamental basis of our elective process. If events in Richmond breed more cynicism - and this has been my fear expressed in so many columns - then much more is at risk this week than the budget.

That being said, the die is cast. In the end, the decision by House Speaker William Howell, R-Stafford, to get four Republicans to absent themselves from the House Finance Committee's key meeting last month will be seen as the pivotal event in the whole saga. 

It might cost him his job. The Senate always wanted to raise taxes as high as possible. Gov. Mark R. Warner always was ready to sign just about any tax bill the General Assembly would pass. So the ball always rested in Howell's court. 

He knew that 15 to 20 Republicans seemed willing to back a sales tax hike if they could say it was necessary to avoid a government shutdown. The cigarette tax was always baked into the final deal. 

So in the end, I figure he thought as follows: He didn't want to have the spectacle of a coalition of Republicans and Democrats voting on the floor of the House an unprecedented motion to discharge the tax bill from a nay-saying Finance Committee. He probably felt such an action would drive the 17 rebel Republicans too close to the Democrats and might lead to any number of future things in the House. So he did the practical thing. 

He was never a big fan of referendum politics. On the budget, his chief advisor was likewise never a true GOP anti-taxer. Quite the opposite, House Appropriations Chair Vincent Callahan, R-Fairfax, was always willing to raise the sales tax if necessary to defeat the Governor and the Senate's proposal to raise the top income bracket. 

The success or failure of this long-running soap opera will be decided not this week but the first Tuesday after the first Monday two Novembers from now. 
If cynicism wins, then this whole thing will be an unmitigated disaster for Virginia. But the people are smart, so we can hope this will not be the case. 

-- April 26, 2004











































Paul Goldman, the Rebel With a Cause, was chief political strategist for the past two winning Democratic governors in Virginia and was credited with leading a "revolution in American politics" by The New York Times for his role in breaking America's 300-year-old color barrier in national politics.


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