Virginia's taxaholism

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The Virginia legislature opens it 2004 session this week under the cloud of Gov. Mark Warner's proposal for the largest tax increase in the state's history.

The proposal includes a 22 percent increase in the sales tax, from 4.5 percent to 5.5 percent. It includes a 10 percent increase in the top income tax rate in the state, from 5.75 percent to 6.25 percent.

In the future, it would raise income taxes on seniors age 62 to 64, and on some seniors 65 and over, by eliminating or reducing current income exemptions for them. It would also increase the cigarette tax by 10 times and give local governments the authority to triple that.

The plan throws some bones to taxpayers, like finishing the phase out of the car tax over an excessively long four more years. But overall the plan would raise state taxes by a record $1 billion over the next budget cycle.

The governor says the tax increase is needed to cover continued budget shortfalls after recent severe budget cuts. Indeed, he has successfully sold this line to the weak Virginia media.

But annual state spending has been increased by $2.5 billion since the governor entered office, not cut. The state budget is now at the highest level in history, up $6 billion, or 28 percent, over the last five years.

Moreover, the governor now proposes with this budget a whopping 13.2 percent increase in this budget cycle over the last one. Without the supposedly essential $1 billion tax increase, state spending would still increase a way too high 11.3 percent.

Adopting the largest tax increase in the history of Virginia so it can increase the next budget by 13.2 percent, instead of 11.3 percent, would be serious taxaholism. Obviously, tax revenues are rising too rapidly and need to be cut, not increased.

The voters have already spoken, and overwhelmingly rejected, the main revenue raiser in the governor's package, the 22 percent sales tax increase. In November 2002, Northern Virginia voters rejected an increase half as large by a margin of 55 percent to 45 percent, even though foolish business special interests spent $2.5 million to hoodwink voters into supporting the idea. In Tidewater, voters rejected the same increase Mr. Warner now proposes by a smashing 63 percent to 37 percent.