George Fitch has finally entered the gubernatorial fray in a public way, questioning Jerry Kilgore’s commitment to cutting taxes. Said Fitch of Kilgore in a press release distributed late Sunday night: โHe puts his anti-tax foot in, he pulls his anti-tax foot out. Heโs doing the โhokey pokeyโ with the taxpayers of Virginia.โ
“Kilgore proposes limiting hikes in real estate tax assessments to 5 percent beginning in 2009, if approved by a constitutional amendment,โ Fitch declared. But the amendment would not guarantee tax relief, he charged: All it does is cap assessments and not the tax rate.
Fitch makes a good point. But what’s his preferred tax cut? It turns out he wants to finish phasing out the car tax cut.
(Bacon puts his head in his hands and moans.) What is this obsession with the car tax? Yes, I know people hate it. But there are soooo many problems with it. (1) The benefits from repeal of the car tax are distributed incredibly unequally across the state; (2) the repeal rewards those localities that had raised their taxes the highest, not those that had tried to keep taxes low; (3) the state has consistently under-forecast its liability for the tax, making it more difficult to plan expenditures; and (4) repealing the tax cuts the cost of automobile ownership at a time when, due to increasing traffic congestion, we should be increasing the cost of ownership.
Finally, (5) there are so many alternatives for cutting taxes that could reward people for working harder (trim the top rate of the state income tax), help support working families (increase the state income tax deduction for children), promote economic development (reduce corporate taxes on small and midsize businesses). The list could go on. Repealing the car tax may be good politics, but it is not good governance.
Fitch has dubbed himself a supply-side, Reagan-style conservative, and I’d taken him at his word when profiling him recently in Bacon’s Rebellion. But there’s nothing “supply side” about repealing the car tax. I’m very disappointed.


