- The Washington Times - Monday, December 1, 2003

”I will not raise taxes! I will not raise taxes! I will not raise taxes!” That quote, courtesy of the Richmond Times-Dispatch, was Mark Warner, speaking on Jan. 24, 2001. “Let me set the record straight: I will not raise taxes.” That was Mr. Warner in a television commercial nine months later, as his campaign for governor entered the home stretch. Once Mr. Warner was elected governor the following month, however, everything changed. The governor spent virtually all of last year campaigning in favor of referendums that would have increased sales taxes to pay for transportation projects in Northern Virginia and Tidewater. In the end, all he received for his efforts were a pair of humiliating political setbacks. But the governor is not one to give up easily.

For months, the worst-kept political secret in Virginia was the governor’s desire to push some kind of tax increase package through the General Assembly in the name of reform. Last week, he released many of the specifics of his tax plan. While it contains some positive points, it is laden with provisions that redistribute the tax burden in ways that make the “rich” pay more. Unfortunately, his plan does nothing to deal with the crux of the problem: state spending that continues to balloon. Still, it’s a smart political strategy. By announcing it and lobbying for passage right after the election, Mr. Warner gave legislators the maximum time possible before they have to face the voters.

Mr. Warner proposes: increasing the sales tax from 4.5 percent to 5.5 percent; increasing the state cigarette tax, now 2.5 cents per pack, by 25 cents; and allowing counties to impose a local tax on tobacco of up to 50 cents.

On the positive side, Mr. Warner says he has decided not to propose extending sales taxes to cover services. He also proposes reducing the sales tax on groceries from 4 percent to 2.5 percent; phasing out the hated car tax by 2008; increasing the personal exemption for individuals and married couples; and abolishing the estate tax for working farms and family-owned businesses.

In addition to the sales and cigarette tax increases, the Warner plan contains other troubling features. Currently, all taxpayers pay an income tax of 5.75 percent. The governor wants to create a new 6.25 percent bracket for taxable incomes of more than $100,000. While such a backdoor tax increase proposal faces tough sledding in the House of Delegates, where Speaker William Howell and most Republican members are deeply skeptical of tax increases, the same can’t be said of the Senate, where lawmakers like Finance Committee Chairman John Chichester may well try to increase sales taxes or delay a phaseout of the car tax.

Unfortunately, the governor’s (and some Republicans’) fixation with increasing taxes causes them to ignore the need to control spending. Statistics compiled by the Fairfax County Taxpayers Alliance, for example, show that, from fiscal year 1997 through fiscal year 2004, spending would have needed to increase from $17.1 billion to $21.7 billion to keep up with inflation and population growth. Instead, Virginia is expected to spend $26 billion next year. It’s time for Mr. Warner to stop fixating on redistributing the tax burden and take a serious look at ways to rein in spending.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide