The Club for Growth

Phillip Rodokanakis



Tax Fever

Just like the flu, a tax-increase fever is afflicting our legislators in Richmond. Unlike the flu, there is no vaccine to protect Virginia families from this malady.


“Raising taxes won't balance the budget.  It will encourage more government spending and less private investment.” –-Ronald Reagan


Just about everyone predicted that the 2006 session of the General Assembly would generate cries for raising taxes as legislators gathered in Richmond. But no one imagined the cacophony of shouts, bellows, alarums and roars that would emanate from the capital.


Gov. Tim Kaine (D) did not waste any time in proposing new taxes. At least Gov. Mark Warner (D) had the decency to wait a couple of years before breaking his campaign pledge not to raise taxes. With Kaine we are assured that we won’t have to put up with such niceties.


Kaine is proposing to generate $4 billion over the next four years to fund transportation projects across the state. He wants to increase the car sales tax by two percent, increase the car insurance tax and dedicate one-third of it to transportation, raise registration fees for heavier vehicles, increase fines for certain traffic violations, and use the budget surplus for one-time expenditures.


Not to be outdone, Sen. “tax them until they’re dead and then hit them with the death tax” John Chichester, R-Fredericksburg, along with the RINOs (Republican In Name Only) that control the state Senate, are proposing their own series of tax increases. They too want to raise about $4 billion over the next four years. But the Senate plan calls for even more new tax-increase initiatives than the Governor’s plan.


The Senate calls for a two percent increase in the car sales tax, dedicating one-third of auto insurance premium tax to transportation, applying the state’s sales tax on gasoline sales, begin applying the sales tax to auto repairs, apply the same tax rates to diesel fuel as currently applied to gasoline, increase vehicle registration fees by $10, and hit SUVs with an additional $10 registration fee.


All talk of additional taxes comes in the face of an unprecedented budget surplus. But our legislators have already spent most of the surplus without even considering refunding part of it to the taxpayers.


By definition, a surplus consists of tax collections that exceed what is required to cover the expenditures called for in the budget. When you break out a twenty dollar bill to pay for a lesser purchase, you expect to get back change, the difference between the purchase price and the bill you turned over. But that real world example, does not apply in the la-la land where our government operates.


Not to be outdone, four legislators from Northern Virginia (NOVA) are proposing to raise even more revenues. According to these big spenders, the money raised through their proposal will be allocated to the Northern Virginia Transportation Authority (NVTA) to fund local transportation projects in the area.


Parenthetically, the NVTA was to have been funded by the sales tax increase that was proposed in the 2002 sales tax referendum. Once the voters convincingly voted down this asinine proposal, by all accounts the NVTA should have ceased to exist. But just because the voters said no, that does not make a bureaucracy go away—its backers persevere until they can get their pet project funded.


Three NOVA Republican legislators, Del. Dave Albo, R-Fairfax, Del. Tom Rust, R-Herndon, and Sen. Jeannemarie Devolites-Davis, sided with the most out-of-touch liberal democrat, Kenneth Plum, D-Reston. They propose civil penalties in the form of surcharges for certain offenses relating to the operation of a motor vehicle by persons residing in NOVA.


These additional penalties apparently apply only to NOVA residents. In other words, residents not residing in NOVA caught committing the same offenses in this area, are not subject to the additional fines. Yet NOVA residents will be subject to these penalties regardless of where the offense is committed.


This bill is the new and improved version of a similar bill submitted by Albo and Rust in 2005. It was a bad idea then and it is a bad idea now. It is no secret that for each dollar NOVA sends to Richmond, only a small fraction comes back. Depending on how government goodies are priced, only 20 to 45 cents on the dollar returns.


Albo and Rust obviously want to exaggerate the disparate treatment that NOVA residents are subjected to by our Robin Hood-like government in Richmond. Worse, Albo continues to propose this sort of legislation in the face of an apparent conflict of interest.


You see, Albo makes his living as an attorney representing traffic violators in court. A cynic might therefore conclude that Albo’s sole motivation in raising the penalties imposed on traffic offenders is to ensure that more of them would seek attorneys to represent them in traffic court.


Although I am confident that this is not the case, I sure wish that the General Assembly would rein in the good old boy network by stiffening up the ethics rules. For starters, it should be prohibited for legislators to submit legislation in any area that directly benefits them, whether professionally or personally. You would think that this would go without saying, but apparently such ethical cannons need to be spelled out for certain folks.


What is amazing about the debate over taxes is that no legislator has seen fit to propose any eliminations or reductions in existing government programs. Unfortunately, when it comes to the state budget, our legislators operate with a single mindset—increase spending and raise taxes.


A tax-increase fever of new proportions has apparently hit Richmond. Just like the way in which flu spreads through casual contact, this malady has actually infected too many of our legislators. Unlike the flu however, no vaccine exists to thwart the catastrophic side effects that stand to befall on Virginia families.


-- January 30, 2006








Phillip Rodokanakis, a Certified Fraud Examiner, lives in Oak Hill. He is the managing partner of U.S. Data Forensics, LLC, a company specializing in Computer Forensics, Fraud Investigations, and Litigation Support. He is also the President of the Virginia Club for Growth.


He can be reached by e-mail at [email protected].


Read his profile here.



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