Kilgore Cop Out

Now we know how Jerry Kilgore intends to deal with the tax issue — pass the buck to the voters. Formally announcing his candidacy yesterday, he promised (according to the Richmond Times-Dispatch) “to harness hostility to taxes by promising a voter veto for any sales-, income- or gasoline-tax increase.”

Huh? If he’s against tax increases, why doesn’t he just say he’s against tax increases? Why doesn’t he just say he’ll veto a sales-, income- or gasoline-tax increase? Is this some kind of maneuver to avoid offending voters while, at the same time, avoid offending the pro-tax Republicans in the General Assembly? How wishy-washy can you get?

Admittedly, there are worse ideas than letting the voters decide. A couple of years ago, they had enough sense to vote down higher sales taxes in Hampton Roads and Northern Virginia. Here’s the problem, holding down taxes is just the beginning of governance, not the end of governance. Virginia has real problems. We have traffic congestion. We need to improve the quality of K-12 education and the quality, affordability and accessibility of higher education. We have a long way to go in cleaning up our environment. We have a metastasizing Medicaid program that threatens to eat up the state budget, and runaway spending on health care generally. It’s fine to say that Virginia can meet these challenges without raising taxes. But how?

Anti-tax candidates are right — raising taxes is bad. It hurts the taxpayers, and it makes Virginia less attractive in the competition for corporate and human capital. But holding the lid on taxes and letting the other problems spiral out of control is even worse! Unfortunately, I have heard nothing from Kilgore suggesting that he has a clue on how to deal with these problems. Kicking the tax issue back to the voters doesn’t solve anything. The voters are looking to him for solutions!

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  1. Anonymous Avatar

    Actually, the problem is that we don’t know which is worse: more taxes or less services. Even if we knew, we wouldn’t agree on the results.

    Some people claim the best thing to do about congestion is nothing. Some people would like nothing better than to see our overly consumptive economy grind to a halt. That way we could all stay home with our kids and not need kindergartens.

    We might decide we prefer to let our old people age gracelessly and die early rather than pay for more golf courses for doctors to play on.

    We might decide that our environmental problems are primariy urban in nature and that all infrastructure is environmentally damaging.

    Or we could go the other way and tax every dollar a hundred percent and send the entire continent to Carnival for the winter.

    Somewhere there is probably a happy medium, but we will never find it on account of winner take all politics.

    If we start using Gross Domestic Happiness or some other indicator of real progress instead of GDP we might eventually get to Fundamental Change, but I doubt it.

    Ray Hyde

  2. Jim:

    I agree with your post, save this:
    “Anti-tax candidates are right — raising taxes is bad. It hurts the taxpayers, and it makes Virginia less attractive in the competition for corporate and human capital.”

    What about business PACs like Leadership for Virginia – mostly pro-tax Republicans – who believe a strong infrastructure, education system, and investment in communities improves the pool of workers from which they can select, and therefore, their bottom line?

    These same groups oppose anti-gay social legislation for the same reason – descriminatory legislation detracts workers from the Virginia.

  3. Will Vehrs Avatar
    Will Vehrs

    Jim, perhaps this is the only way to deal with legislators who run anti-tax campaigns to get into office, then vote for tax increases.

    Paul, at least concede that those business PACs have their own self-interest in mind when they propose higher taxes for the citizenry. Have they proposed raising the corporate income tax?

  4. John K. Avatar

    Ray and Jim make good points, but let’s not continue to conflate anti-tax sentiments with low-tax advocacy. Is there a genuine anti-tax movement afoot in Virginia? To be sure, a society like ours requires public revenue streams, but outdated thinking regarding process and what sacrifices should be expected from each citizen requires considerable review.

    Tim Kaine and Jerry Kilgore both seem to have caught on that real property taxes are an obsolete if not “unfair” means of funding government services. The uniformly hated “car tax” (i.e., personal property tax) is another example of our antiquated system that just won’t die….

    More specifics from of the candidates on these taxes are interesting campaign fodder, but maybe they should start with a frank discussion of their philosophical underpinnings on this issue.

  5. Jim Bacon Avatar
    Jim Bacon

    Ray: I like the idea of measuring “Gross Domestic Happiness.” Ultimately, it IS all about happiness, not merely generating income. There have been some efforts to measure quality of life, but they don’t seem to have gotten very far. The most commonly used yardstick is “income per capita.” That’s a start. But it needs refinement. How about “income per capita” adjusted for taxes, in other words DISPOSABLE income per capita? Why stop there? Why not adjust also for cost of living? If you do all that, you’ll find that the difference in the quality of life between, say, Northern Virginia and Roanoke is not nearly as large as the gaps in income per capita might imply.

    But those adjustments only scratch the surface. People put a huge premium on their time. One reason people like smaller communities is that it consumes less time to get around. Time spent “commuting” is time not spent with family, devoted to hobbies, jogging, watching the tube, whatever. Long commutes detract from quality of life; short commutes add to it. Furthermore, time spent commuting stands as a proxy for all the other travel one must engage in to run errands, go to church, pick up the kids, etc. That’s a big reason that transportation/land use issues are so critical.

    Other measurable indicators: Quality of education and other public services… cleanliness of the environment… quality of health care…. access to cultural opportunities, shopping, other non-governmental amenities.

    Sadly, very few people are tracking these measures.

  6. Jim Bacon Avatar
    Jim Bacon

    Paul, you are right, communities do need to invest in public infrastructure. We need to devise ways to cut taxes AND invest in public infrastructure. Some people say that’s impossible, that it’s a zero sum game. I disagree… We can have our cake and eat it, too, but it requires thinking outside the box.

    First, we streamline governmental processes. We’ve made some small progress in this regard, but have a long, long way to go. I’m sorry, but I cannot justify higher taxes if it’s possible to operate government more efficiently.

    Second, we change our dysfunctional land use patterns. As Ed Risse and I have argued ad nauseum, dysfunctional land use patterns drive up the cost of transportation and providing government services. Moving to more balanced, better designed communities will go a long way to reduce the cost of government.

    Finally, look for opportunities to outsource. Government’s job is to ensure that certain things get done — that children get educated, that poor people get health care, that roads are built. There’s no compelling reason that government has to be the entity that PROVIDES those services.

    We have a LONG way to go before we can say that tax increases are justified.

  7. Jim Bacon Avatar
    Jim Bacon

    Will: There’s a special circle in hell for politicians who promise not to raise taxes, and then turn around and raise them. And there’s an inner ring of fire in that circle of hell for those who raise taxes without even looking for alternative strategies!

    John: You’re correct to distinguish between the “anti-tax” movement and the “low-tax” movement. Only a handful of libertarians and anarchists would seriously argue to dispense with taxes entirely. A respectable case can be made, however, that Virginia should strive to be a “low” tax state by stressing the kinds of reforms I discuss in the posts above as an alternative to raising taxes.

  8. Anonymous Avatar

    Can we stop arguing back and forth about whether people think their should be or shouldn’t be a referendum on a tax increase….

    We’re asking the Attorney General (and Lt. Governor) what their solutions are. Mr. Kilgore – if there was a referendum, how would you vote? What are your values – do you believe in investing in education or not?

  9. Anonymous Avatar

    Are you suggesting that quality of life is represented by economics? Heresy.

    Actually, there is a thing called the Genuine Progress Indicator which purports to measure sustainable development. It is based on:
    Time Use
    Economic Value of Civic and Voluntary Work
    Economic Value of Unpaid Housework and Child Care
    Work Hours
    Value of Leisure Time
    Natural Capital
    Soils and Agriculture
    Marine Environment/Fisheries
    Environmental Quality
    Greenhouse Gas Emissions
    Sustainable Transportation
    Ecological Footprint Analysis
    Air Quality
    Water Quality
    Solid Waste
    Income Distribution
    Debt, External Borrowing, and Capital Movements
    Valuations of Durability
    Composite Livelihood Security Index
    Social Capital
    Population Health
    Educational Attainment
    Costs of Crime
    Human Freedom Index –

    All of these are combined numerically and compared with the GDP. If GPI goes up faster than GDP you are making progress, otherwise not.

    But it does not include measures such as disposable per capita income, support for hidden subsidies, transaction costs of regulation, although you could argue that the list above is sufficiently inclusive (and value laden)that all goodness is covered one way or another.

    I agree with you that people want smaller communities, but that means we are going to have to spread the jobs around more.

    For fifteen years I had a five minute commute and it was a luxury. I lost that luxury when my place of business was torn down to make way for high dollar town homes. The only way we can have the smaller communities people desire is to spread the jobs around more.

    That happens naturally as a response to high busines rents and high living costs, but like the rest of the built environment, it is sluggish to change.

    I don’t buy the argument that commuting distance is a proxy for all the other errands, but there is an element of truth. If everyone goes everywhere all at once the roads could never keep up.

    That doesn’t happen because people are not clueless. They do arrange their lives and activities spatially, but because so many are either re-arranging or stuck in place at any given time it appears dysfunctional.

    And let’s not forget that part of the problem is that road construction has not kept up with economic development.

    I have three 3-D maps of a German city. The first shows job density as a sharp spike in the plane and with some shoulders and subshoulders around the CBD.

    The second map shows the residential population density, which is a bunch of little mole hills scattered around. The communities are evident on this map.

    The third is the traffic density. It shows as a bump in the middle of the plane, too, but the bump is nowhere near as pronounced as the job density, and the shoulders are much broader and with sub-bumps located where the molehills are in the residential map.

    It is clear from the maps that people and businesses are avoiding the CBD and its associated congestion. Congestion won’t go away,(if it does, we’re screwed) but you could take the worst peaks out of the map by moving a few job sites.

    Aside from protecting life and property, the business of government is to mitigate the unfortunate friction and problems people generate when they are in contact with each other. It is for that reason that cities are such infrastructure hogs. More people, more density, more friction, more expense.

    Cities are grossly inefficient, and always will be. Congestion is one indicator of inefficiency, and it doesn’t have to mean automotive congestion. City dwellings require more energy, more sewage disposal, and more engineering.

    All that infrastructure doesn’t change the cities’ dependence on the land, it only masks it.

    It is well to (try) to use the infrasturcture we have to best capacity before we build more, no argument there. But much of what we have is obsolete, insufficient, in bad repair, and in the wrong places.

    The ideal of reaching 100% of capacity before we build the next increment will never be reached and it would be inefficient if we did. Sometimes it’s just cheaper to build new.

    As it turns out, building new is the one service government doesn’t have to provide.

    Ray Hyde

  10. Anonymous Avatar

    Here is a fascinating article on various levels of government services vs the perceived public happiness:

    Europe’s economies: Old vs. new, or 25 hues of capitalism?

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