November’s election results shook Republican resolve. Seeing Barack Obama retain his grip on the White House inspired a number of GOP statehouse leaders to wave the white flag on taxes during the “fiscal cliff” debate. On Wednesday, Virginia Gov. Bob McDonnell went a step further by proposing to raise taxes by $3.1 billion as part of his transportation agenda.
The scale of the tax hike is somewhat masked by Mr. McDonnell’s bold proposal to abolish the gasoline tax. Currently, Richmond pockets 17.5 cents each time a gallon of gas pumped into a car in the Old Dominion. This is actually a better deal than Americans get in all but 10 states, according to the American Petroleum Institute, but Mr. McDonnell would replace this reasonable tax with a hike in the sales tax from 5 percent to 5.8 percent, extracting $607 million more from Virginians over five years.
The attack on the motor fuels excise tax is based on the bogus premise that roads are being starved of maintenance funding because gas-tax revenue is “stagnant.” According to the latest available Commonwealth Transportation Fund report, gas-tax revenues grew 2 percent last year. Considering how badly the economy is doing, that’s respectable performance. The real reason maintenance needs are lagging is the state is blowing $6 billion on a pointless train to Washington Dulles International Airport and providing millions to an Australian company that’s converting Virginia’s freeways into toll roads.
That would be bad enough, but Mr. McDonnell’s deal includes several more revenue-raising features. Automobile-registration fees would increase by $15, and liberals who purchased an “alternative-fuel vehicle” such as a Chevy Volt would be punished with a $100 tax. Worst of all, Mr. McDonnell expects to impose a $1.6 billion tax on residents who buy goods from online retailers, presuming Congress enacts legislation compelling remote sellers to collect sales taxes on behalf of state and local governments. “These changes are not a tax increase,” the governor’s office explains in its talking points. “The revenue from the Marketplace Equity Act is revenue that Virginia should already be collecting.” Even the Republican-dominated House of Delegates voted heavily in favor of taxing online giant Amazon.com last year.
If Republicans continue to act as lighter versions of tax-hiking Democrats, there will be little reason for voters to bother pulling the lever for a GOP candidate. Like all Americans, Virginians are sending enough of their money to governments at all levels. Mr. McDonnell’s proposal ought to be rejected.
The Washington Times