by James A. Bacon
With apologies to Jimmy Fallon:
Thank you, Congress…. for your inability to pass the Marketplace Fairness Act. Your legislative ineptitude not only spared Virginians from paying an estimated $250 million a year in online sales taxes, but it triggered a provision in Virginia law replacing the anticipated set-aside of $168 million of that sum with a 5.1% wholesale gasoline sales tax — actually requiring people who drive cars to pay a portion of the cost of building and maintaining roads.
The Rube Goldberg taxation scheme was enacted by the 2013 General Assembly as part of the McDonnell administration’s transportation tax deform program to raise an estimated $880 million for new road and mass transit projects. The law scrapped the retail gas tax, jacked up the retail sales tax, hiked fees on motor vehicle sales and titling and tapped the expected revenue geyser from the sales tax on online sales. Virginia’s lawmakers were astute enough to anticipate the possibility that a gridlocked Congress might not get around to passing the online sales tax, however, and approved a backup, the higher wholesale gasoline tax, as a replacement.
Virginia’s 2013 tax deform was an abomination because it obliterated the user-pays principle for transportation funding, in which the people who use roads and rail are the ones who pay for it. Legislators embraced the essentially socialist principle that everyone should help pay for transportation infrastructure, regardless of how much they use it, or indeed whether they use it at all. Telecommuters, bicycle riders, pedestrians and little old ladies who drive 3,000 miles a year contribute as much through their sales taxes as road warriors driving 20,000 miles a year and rail riders who pay nothing toward the cost of building their projects.
By jacking up the wholesale price of gasoline, the commonwealth will partially, though incompletely, restore the user pays principle, at least for road users. The system for financing transportation improvements in Virginia remains hopelessly broken, but it’s a little less hopelessly broken than it otherwise would have been.
