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“Take care,
your worship, those things over there are not
giants but windmills.” --Miguel de Cervantes
Saavedra (Spanish writer, author of the masterwork
'El quijote', 1547-1616)
Last week, the Wall
Street Journal (WSJ) ran an Op-Ed entitled
“How to Turn a Red State Blue.” The column
opened with oomph: “If you think Republicans on
Capitol Hill have troubles, take a look at
Virginia, where GOP lawmakers are busy writing an
instruction manual on how to become a minority
party.”
This was a
reference to state Senate Republicans proposing
another massive tax increase -- on top of the
largest tax increase in the history of our
Commonwealth enacted just two years ago and signed
into law by that no-nonsense, straight talking,
governor, Mark Warner (D), who repeatedly told us
that he would not raise our taxes.
In Richmond
newspeak, it appears that a promise not to raise
taxes is a promise to raise taxes. You know, like
when teenagers say “bad” meaning “good.”
But you cannot
blame Warner or our new Governor, Tim Kaine (D).
The voters apparently have no problems when their
politicians lie to them outright. Warner left
office with a high approval rating, even though he
repeatedly deceived the electorate.
So, what is our
new Governor to do? How does he go about outdoing
Warner’s track record? Simple; he proposed a tax
increase even before he got sworn into office. At
least Warner took three years before raising
taxes. Not a bad start, for a guy that also
campaigned on a promise not to raise taxes.
But you cannot
blame our Democrat Governors. They represent the
party that historically stands for higher taxes
and bigger government—so raising taxes is
something you'd expect them to do regardless of
what they tell you. But now the Democrats are
getting a run for their money: Republicans,
particularly in the State Senate, are falling all
over themselves in trying to outspend the
Democrats.
Senate
Republicans have proposed another massive tax
increase, ostensibly to fund transportation and
free us from gridlock. They propose to raise an
additional $4.4 billion over the next four years
by implementing a series of tax increases.
The WSJ labeled
the Senate tax plan bizarre and complicated—a
plan that has made our tax-and-spend Senators a
laughing stock nationwide. Part of this silly
Senate plan calls for raising the gas tax by 5
percent but allowing motorists to get rebates if
they keep shoeboxes full of tax receipts. Excuse
me for asking the obvious, but is this our Senate
version of a free lunch? How are they going to
raise all these new revenues if everyone applies
for a rebate? It appears that our wise Senators
are banking that most motorists will not bother
keeping their receipts.
The Senators must
be reminiscing of the good old days when the IRS
rules allowed the deduction of state sales taxes.
However, to justify the deduction one had to keep
all their retail sales receipts. This was a major
headache for most taxpayers and when this
deduction was eliminated, there were no cries for
holding on to thousands of scraps of paper.
Former Gov. Jim
Gilmore (R), in collaboration with Americans for
Freedom and Prosperity, estimate that the
tax-increase proposals will hit the typical
Virginia family (owning 2.1 cars) with an
additional $678.98 in annual taxes. That increase
will follow the significant tax increase enacted
in 2004 and the annually escalating real estate
property taxes, which have almost doubled in
certain jurisdictions over the last five years.
According to data
from the U.S. Census Bureau, over the last decade
the tax burden in Virginia increased by 55
percent. Contrast that to the state of Maryland—a
bastion of tax-and-spend liberalism— where the
tax burden only went up by 46 percent during the
same period.
Virginia used to
be a low tax state. According to the Tax
Foundation, in 1995 Virginia ranked 42 out of 50
(with 50 being the state having the lowest tax
burden). Today, it has moved up the scale and
ranks 34 in comparison to other state tax burdens.
In other words, as we are moving up the state
tax-comparison scale, we keep on losing our
economic competitiveness.
There is little
doubt that something needs to be done about our
transportation gridlock. However, our state
governments approach to our transportation
quagmire is schizophrenic. The state does not
spend income taxes—the state’s major revenue
source—on transportation. And of the 5 percent
sales tax, only ½ of one percent is dedicated to
transportation. The Fairfax County
Taxpayer Alliance calculates that since 1979,
Virginia per-capita spending on transportation has
remained stagnant, hovering around $400 per
person. Worse, from time to time the state
government has raided the transportation trust
fund, particularly during the early 1980s and
1990s recessions.
Even though
everyone professes that transportation funding is
a priority, politicians somehow manage to fund
everything else before finding out that there is
no money left for transportation. Is that how you
fund priorities in your family budget?
The only way to
put an end to this insanity is to completely
revamp the state budget. We must identify and fund
our state priorities. And if transportation is a
state priority, it should receive the funding it
deserves—not put aside to be funded by a new tax
increase down the road.
Unfortunately, it
is unlikely that sanity will prevail, not as long
as the current Republican leadership in the state
Senate is in control. It will not be long before
the current leadership manages to transform
Virginia into a blue state, at which point they
should have no problems enacting new tax increases
in every budget cycle—but by then the
Republicans will have in all likelihood lost their
majority.
--
February 27, 2006
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