- Egypt rights center raided, 2 Mubaraks acquitted
- New Mexico Supreme Court rules same-sex marriage constitutional
- Blame Bush: 5 years later, that’s still the mantra, pollsters find
- Dutch prostitutes demand same retirement benefits as soccer stars
- John McCain to Harry Reid: I’ll ‘kick the crap’ out of you
- Dogs that talk: Researchers seek $10K for ‘No More Woof’ technology
- 1,000 firefighters called to battle stubborn Big Sur wildfire
- Black Friday brouhaha: Millions of Target shoppers hit by credit card theft
- Britain orders airplane to rescue citizens from violent South Sudan
- Mega Millions winner emerges as Georgia mom, in ‘disbelief’
EDITORIAL: Virginia’s taxing Republicans
Corporate levy should be eliminated, not increased
Question of the Day
The government apparatus in Virginia will extract $38.6 billion in taxes, fees and charges from the public this year. As the General Assembly convenes the 2011 regular session today, some lawmakers are suggesting this considerable sum isn’t enough. They want more wealth transferred from consumers’ pockets into Richmond’s coffers.
Take a bill introduced by Del. David B. Albo, Del. Thomas Davis Rust and Del. Joe T. May - all Republicans representing northern districts. The trio propose applying Virginia’s corporate tax to the sale of services performed by out-of-state businesses in the commonwealth. That means a technology firm based in California that, for example, optimizes a computer network in Alexandria without ever stepping foot in the Old Dominion would have to give Virginia a cut of the action. Supporters insist their measure merely closes a “loophole” in the state code that treats goods and services differently for the purposes of taxation. They argue that updating the law to match the practices of about a dozen other states would level the playing field with those jurisdictions and encourage job creation.
“To me it seems like a no-brainer,” Mr. Albo told The Washington Times. “[The current law] harms Virginia businesses, and on top of that the out-of-state company has absolutely no incentive whatsoever to put jobs in Virginia. The last thing a California company that does multistate services wants to do is plop jobs in Virginia because, if they do, they’re going to get taxed.”
Yet this proposal is not a simple rebalancing of the code to provide relief in one area while increasing the burden an equal amount in another. The measure instead is being marketed as a way to generate between $150 million and $200 million in net revenue for the highway fund. It’s naive to imply that these funds will come from nameless out-of-state firms without consequence to the commonwealth. To the contrary, it’s likely the cost would be passed directly to Virginians in the form of higher prices for services.
While the Joint Legislative Audit and Review Commission suggested closing this “loophole,” the same legislative oversight body also examined the option of eliminating the corporate income tax in its entirety. That’s the kind of change that would help bolster Virginia’s business-friendly reputation and attract more firms to relocate from high-tax states without harming residents already overwhelmed by the burden of government levies.
Such tax cuts are less popular among politicians who don’t like making hard choices and ditching popular but wasteful projects. Too often, squishy Republicans believe a vote against a direct tax increase is all it takes to earn the “anti-tax” label - as if indirect extractions from the populace are somehow different when called a “fee” or imposed “out-of-state.” It’s no coincidence the corporate tax idea comes from Mr. Albo, architect of the reviled “abusive driver fee” that imposed a $1,050 tax on speeding a mere 10 miles-per-hour over the limit on a rural interstate. A virtual revolt of motorists forced greedy legislators to back off and return the loot collected.
The General Assembly ought to look for the money it needs to address Northern Virginia’s congestion problems by canceling boondoggles like the Dulles Metro extension, the cost for which has exploded to $6.6 billion.
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
About the Author
- EDITORIAL: Ducking tolerance
- EDITORIAL: Red faces at the White House
- EDITORIAL: Doc Coburn's government diet
- EDITORIAL: A man for 2016
- EDITORIAL: Spies unlike us
Latest Blog Entries
By Michael P. Orsi
Get Breaking Alerts
- Citing 'unfair system,' Obama commutes sentences for 8 crack offenders
- Gov't wasted $30 billion on 'pillownauts,' crystal goblets -- buying human urine!
- Homeland Security helps smuggle illegal immigrant children into the U.S.
- Bill Gates: The Secret Santa disguised as a 'friendly fellow' on Reddit
- Obamacare 'pajamas boy' gets roundly mocked
- Duck Dynasty Phil Robertson suspended indefinitely for gay quip
- Outrage over Phil Robertson suspension, 'malignant' political correctness
- Sebelius adds another Obamacare exemption
- Armed response, not restrictive gun laws, brought swift end to school shooting
- BOLTON: Nero in the White House