Bacon's Rebellion

Where Do Republicans Come Up with These Ideas?

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by

James A. Bacon
in

If Republicans wonder why Virginia voters no longer associate the GOP with fiscal conservativism, you need look no farther than a bill submitted by Del. L. Scott Lingamfelter, R-Dale City. A retired Army colonel, Ligamfelter proposes legislation that would exempt federal, state and local government retirees’ pay from state income taxes.

Reports the Manassas Journal-Messenger:

“Lingamfelter, who also represents Quantico and eastern Fauquier, said that many of his constituents and residents are retired government employees. He said Virginia’s income tax on their retirement pay is driving retirees away to live in states that don’t touch their pensions. ‘They believe they are being taxed too much so they move to states that guard their income,’ said Lingamfelter.

A tax relief will help stimulate and sustain the commonwealth’s economy and encourage more people to live in Virginia during their retirement, said Lingamfelter. “They’re going to spend money in your community, and as they spend money they pay sales tax,” he said. “As you create more business you create more jobs.”

How many problems are there with this idea? Let me count the ways.

(1) The tax exemption would cost lots of money. How much? The article doesn’t say — because Ligamfelter probably doesn’t know. I would hazard a guess that the number is in the tens of millions of dollars, possibly the hundreds of millions.

(2) Why privilege government retirees? Why not extend the tax exemption to all retirees? After all, some states have lower state income taxes than Virginia. Indeed, a handful of states have zero state income taxes. A lot of retirees establish residence in Florida as a result. By Ligamfelter’s logic, eliminating the state income tax for all retirees would keep more of them in Virginia.

(3) If we want to make Virginia more attractive to live in, why focus on retirees? Why not focus on working people! They have jobs. They earn wages and salaries. They generate even more in taxes than retirees! If we cut the state income tax, they’ll have a greater incentive to stay in Virginia, too!!

We have too many exemptions in our state income tax. We need to close loopholes, treating everyone the same, and lower the rates for everyone.

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18 responses to “Where Do Republicans Come Up with These Ideas?”

  1. Ray Hyde Avatar
    Ray Hyde

    Right On, Jim.

  2. Anonymous Avatar
    Anonymous

    I work in the private sector and participate in a 401K. I have other investments for my wife and I so that we can enjoy retirement. I work upwards of 60 hours a week, my pay varies with the success of my firm, I get three weeks vacation, and only 2/3s the official list of holidays. Most public employees work 9 to 5, 5 days a week, get guaranteed salaries and raises, up to 4 weeks vacation and a holiday a month. ACCORDING TO THIS IDIOT DELEGATE I SHOULD WORK LONGER AND HARDER IN ORDER TO SUBSIDIZE PUBLIC SECTOR RETIREES BOTH TODAY AND WHEN I RETIRE AS WELL?!!!!

  3. NoVA Scout Avatar
    NoVA Scout

    Will VCG and other assorted brickbat-throwers now hurl a few RINOs at Lingamfelter for absolute fiscal irresponsibility? Probably not. He no doubt signed The Pledge, and therefore is immunized. This merely confirms the point that no Party and no element within either party is free from taint in their ambitions to mismanage the fiscal resources of the Commonwealth for narrow gain. I would be interested to read the part of the good Colonel’s legislation where he identifies the increased taxes that will be assessed non-federal retirees and other taxpayors to offset the loss of revenue his bill contemplates.

  4. Stonewall Avatar
    Stonewall

    Wait…wait! I know how we can pay for Lingamfelter’s bold new idea! Why we can close his alma mater, VMI. Look, if it graduated him, it has obviously outlived its usefulness as an educational institution.

    I’m sure Del. Linagamfelter would approve of this modest proposal to help enact his very innovative bill.

  5. subpatre Avatar
    subpatre

    Del. Lingamfelter, ordinarily a man of common sense, has this entirely backwards.

    As a caveat, categorizing any vast group of people –government retirees– is painting with a broad brush. An enormous number may have some characteristic; but still be only a small minority of the whole group.

    Government retirees are people who’ve spent most or all of their lives at public expense. Many have been conscientious and productive, but in a non-capitalistic system.

    Retirees have little or no family expenses or long-term capital debt such as mortgages. With abundant free time, they can live comfortably on very little. In the Valley, though favored for it’s low property taxes, government retirees generally shop out of the area.

    In sum, retirees spend the minimum necessary. The counter argument that they demand less isn’t entirely true either. Retirees unduly burden emergency services and law enforcement with minor concerns.

    More ominously, they are leading and persistent advocates (spare time again) of non-essential government services like health and fitness centers, cultural activities, entertainment, tax-supported transit, and a host of other costly, publicly funded projects.

    Though proffer models are based on the large costs of education, research should be done on overall revenue between active families and retired households. Maybe the Cost Cutting Caucus could do this, unless they balk at undercutting Lingamfelter’s proposal.

    Including dollar-churn* –the total tax revenue generated by locally spent money recycled several times– it’s my guess that retirees don’t emerge as fiscal gains.

    The dark side to this legislation is the state’s motivation and ability to lower retirement benefits –probably by attrition– as a cost-cutting measure. Current employees will more willingly accept reductions because of less tax loss; putting non-government retirees at a disadvantage as taxes are raised.

    To a limited extent, I could understand tax breaks for retired military. Never for civil service, which often sees government as the solution when it’s more frequently the problem. If anyone should be tax exempt to benefit the Commonwealth, it’s entrepreneurs and small business owners. Let’s see Lingamfelter propose that!

    *Can anyone tell me the correct term for this?

  6. Mitch Cumstein Avatar
    Mitch Cumstein

    The important question here is: Who’s Lingamfelter pandering to this time and what political advantage does he expect to receive from it?

    Talk about someone who needs to be “primaried” two years from now. How about spending some time working on transportation instead of worrying so much about homosexuals and fighting your own County leaders?

  7. Lucy Jones Avatar
    Lucy Jones

    Subpatre,

    I don’t agree with this bill either but you appear to be down right condescending to retired folks….

    Government retirees are people who’ve spent most or all of their lives at public expense. Many have been conscientious and productive, but in a non-capitalistic system.

    You make it sound like public employees have been on welfare for 30 years. Retired is Retired no matter what industry you worked in.

    Retirees have little or no family expenses or long-term capital debt such as mortgages. With abundant free time, they can live comfortably on very little.

    What planet are you from? Have you noticed that many retirees can’t afford their basic minimum health care needs?

    Retirees unduly burden emergency services and law enforcement with minor concerns.
    What?

    More ominously, they are leading and persistent advocates (spare time again) of non-essential government services like health and fitness centers, cultural activities, entertainment, tax-supported transit, and a host of other costly, publicly funded projects.

    They’re supposed to just sit at home and die?

  8. Anonymous Avatar
    Anonymous

    I certainly agree that government, or any other, retirees should not be given special income tax consideration.

    I do want to point out that, in general, retirees are excellent sources for volunteerism and an asset for any community. Their wide range of skills can be tapped by charitable organizations as well as governmental agencies/schools.

  9. NoVA Scout Avatar
    NoVA Scout

    What was Lingamfelter’s estimate for the amount of revenue foregone if his proposal were adopted? I assume he has a pretty sharp-pencilled accounting of that. although it seems to be a bit different in Virginia, fiscal “conservatives” tend to be very careful about not making proposals without clearly understanding and informing the public on the fiscal impacts.

  10. CG2 Avatar
    CG2

    Virginia is already a state that treats older citizens (incluing state, local and federal retirees) quite favorably. Older Virginians, who are among our state’s wealthiest citizens as a class, are eligible for special real estate tax treatment and benefit from an age-defined deduction from income. Look here and here for more information. When Virginia couples 65 and over are compared to younger couples, the favorable disparity in tax liabilities consistently ranks Virginia in the top 10 and, sometimes the top 5 of all states.

    So, what problem is it that the good Delegate is trying to cure?

  11. subpatre Avatar
    subpatre

    I previously wrote, “Retirees unduly burden emergency services and law enforcement with minor concerns.”

    LJ wrote: What?
    [Taking the statement out of context doesn’t help, but I wrote it horribly.]

    The argument that retirees demand less services isn’t true. Retirees disproportionately burden emergency services and law enforcement with lesser concerns that would be dealt with by younger persons.

    Of no small matter to emergency services is that “…patients over age 65 are the largest population transported to the hospital by ambulance.” –University of Iowa EMSLRC, Fall 2000 Vol. 21, No. 3
    See also the Bureau of Justice Statistics, ‘Crimes Against Persons Age 65 or Older’, 1993-2002

    Cold, hard fact Ms. Jones: Older people are more prone to medical problems, more likely to be victims of common thefts and the most prevalent petit crimes, and less able to care for themselves. Ignoring the reality of aging is not compassion, it’s foolishness. Ignoring the economics of aging populations not only foolish, but heartless to those who must pay.

  12. subpatre Avatar
    subpatre

    LJ: I don’t agree with this bill either but you appear to be down right condescending to retired folks….

    Perhaps. Reasonable people get that way when government retirees try to enhance their retirement with other folk’s current earnings.

    People who do not plan for their own future, then cry for increasing taxes to finance their lack of forethought or to relieve boredom, deserve either condescension or pity. Your choice.

    This is in stark contrast –one you try to blur– of people who cannot plan for their future, whose plans went wrong, or otherwise need assistance.

    LJ: …. Have you noticed that many retirees can’t afford their basic minimum health care needs?

    Many active workers can’t afford their basic minimum health care needs either. All health costs –from insurance to tax-funded Medicaid and Medicare for seniors– is escalating.

    But no, I haven’t noticed many government retirees who can’t afford basic minimum health care relative to other retirees.

    LJ: They’re supposed to just sit at home and die?

    No, but neither are they supposed to badger government to subsidize continual “free” entertainment, “free” art centers, “free” bus tours, “free” yoga classes, “free” ad nauseum.

    Retirees –government or otherwise– deserve retirement benefits, every last #!*&^# penny of them. They don’t deserve publicly funded tours to Dollywood or Williamsburg; publicly funded dance lessons; publicly funded poetry readings; publicly funded playhouses; publicly funded bicycling, or publicly funded motorcycling. They do not deserve the next generation’s earnings.

    Here’s one example:
    A coalition led by comfortably retired ex-government employees wants local government to convert an old building into a culturally enriching use, and, incidental to the project, evict a seniors’ center for the truly disadvantaged.

    The sympathy Lucy tries to evoke is –certainly in this case– a camouflage for callous, self-centered, greedy people. Perhaps it’s a character flaw that I’m critical (condescending) of people who act that way.

  13. subpatre Avatar
    subpatre

    A (federal retiree) friend of mine says that looong ago Virginia tax-exempted the pensions of Virginia’s retired employees.

    It sounds like a common-sense practice. Rather than send a pension check and then take some of it back, Virginia paid slightly less pension, but required none in tax. However it seems improbable that the state actually administers pension disbursements now.

  14. Anonymous Avatar
    Anonymous

    It wasn’t so “looong ago”, new fella, and your federal retiree’s buddies brought suit to get the same tax exemption. The ennsuing bitchin’ and moaning resulted in a very weird “subtraction scheme” that applied to all persons over the age of 62 and 65 without regard to means.

    The originial theory was that state employees would get less in pension but would get the benefit of state income tax exemption on their state retirement. It was treated as a “perk’ for state employees.

    It put the state budget in a fix (well over$200,000,000/year)for a significant period of time and is one of the reasons that some know nothings can cite a “rapid increase in state spending.” Well, in part, the increase came because was because there was a serious decrease.

    So much for trying to write a retirement policy in the tax code.

  15. Anonymous Avatar
    Anonymous

    Hey Anon 10:26—So much for trying to look after federal reitirees–They’ve formed an interest group–GOGA. That’s Greedy Old Geezers of America

  16. Lucy Jones Avatar
    Lucy Jones

    Subpatre,

    The sympathy Lucy tries to evoke is –certainly in this case– a camouflage for callous, self-centered, greedy people.

    Excuse me, sir, but you are waaaaay out of line. I am in no way callous, self-centered or greedy. I live in a household with 4 retired people. Our family takes care of our own so no one has to burden the welfare system. And don’t even talk to me about health care! We pay thousands every month in health care expenses. Maybe if more people showed the older folks the respect they deserve instead of worshiping the almighty stock market, they wouldn’t need free services from the government.

    You want to gripe about the fun little bus trips for the seniors? Are you equally screaming out about sports clubs, field trips, etc. in the public schools for the children?

    Old people use the emergency systems more? What about the middle aged with their depression, drug addictions, heart attacks, domestic violence, etc? And just who do you think is attacking the old people? Other old people? Not hardly. So who’s fault is it if they are victims? Are you going to watch over them and make sure the people YOUR age aren’t taking advantage of them? I thought not…

    I really can’t tell here what your point is. Since we agreed in the beginning that the bill is uncalled for, what is your gripe? Are you against public employees getting retirements or are you just against old people in general?

  17. subpatre Avatar
    subpatre

    Lucy – I certainly apologize for any comments you misunderstood to be personal. They were not personal, but dealt with “categorizing any vast group of people” and the caveat was clearly presented. That said, whenever someone takes policy positions, arguments, statistics or other facts as a personal insult, lo and behold, they will feel insulted.

    LJ: You want to gripe about the fun little bus trips for the seniors? Are you equally screaming out about sports clubs, field trips, etc. in the public schools for the children?

    The idea that if group A is throwing away money, therefore group B is justified, and groups C, D, E, F, etc. is called the bandwagon fallacy, or argumentum ad populum. Other threads are more relevant to comments on school spending or inappropriate state spending on amusement.

    LJ: Old people use the emergency systems more? What about the middle aged with their depression, drug addictions, heart attacks, domestic violence, etc?

    Older people use medical services, including tax-supported emergency services, more than all other age groups. See: “We pay thousands every month in health care expenses.”-LJ. The middle aged aren’t disorder-free, but your cites are aberrations, not the rule.

    Older people are presented as consuming far less public services and facilities than families with school children, and paying higher taxes on property. I am not sure that’s true: seniors use far more of some services, many localities give them tax-breaks, and as previously outlined some retirees demand additional services and capital expenses.

    It’d be good to see some real research on economic balances, comparing singles, families (currently the most discriminated against group in local planning departments), and the elderly.

    Then there’s Lingamfelter’s idea that government retirees, with median income above the national $36,000, should be income tax exempted. Aren’t introduced bills required to have an economic impact statement?

  18. criticallythinking Avatar
    criticallythinking

    I took a broad stand against this proposal as well, in my column this week in the Potomac News (shameless plug alert).

    I used more words, but can’t say I said anything better than you did, Jim.

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