Politicians testing new ways to raise taxes
2/26/2002 12:00:00 AM - Cal Thomas
Democratic politicians know that when Republicans are successful in cutting taxes it generally provides a political boost to the GOP. That's why they're constantly looking for new ways to get our money without having to call a tax what they take from us and spend on their pet projects. The federal line subscriber charge on our phone bills (along with numerous other stealth charges) is one example of a tax disguised as something else. In many cases, these hidden taxes have the additional benefit of not needing legislative approval.
The new governor of Virginia, Democrat Mark Warner, who pledged not to raise state taxes when he was a candidate, thinks he's stumbled on a brilliant idea. Instead of raising taxes and having to defend himself against charges that he "flipped," Warner and some members of the Virginia legislature want the people to do it. Warner has proposed that state voters be allowed to decide through referendums whether they want to increase Virginia sales taxes.
Supporters are attempting to sell this tax increase in a familiar way. If the people decide not to ante up more money for government, essential services might have to be curtailed or ended. As always, it's the children who would supposedly suffer because new schools would not be built. Oh, and the traffic, already grid-locked during rush hour in the Virginia suburbs of Washington, D.C., would remain at a standstill for even longer periods.
This is a strategy made in political heaven for Democrats. If Virginians approve a sales tax hike, politicians can report, "We didn't raise your taxes; you did." If citizens vote down a tax increase, the politicians can blame the people for any real or perceived decline in services and education -- and escape accountability. Elected officials all over the country will be looking at what happens in Virginia to see if they might promote this scam in their states.
But wait. In Virginia, leading Republicans in the legislature are backing the sales tax hike referendum, even though the GOP enjoys a veto-proof majority. Maybe George Wallace, the late Democratic governor of Alabama, was right when he observed, "there isn't a dime's worth of difference" between the two political parties.
Before Virginia politicians (or politicians in any other state where political pickpockets operate) are given more of the money we earn, the people should demand to see the books. In Virginia, as with too many other governments, the problem isn't taxes that are too low, but spending that's too high. According to figures compiled by the American Legislative Exchange Council, per capita general fund expenditures in Virginia were $778 higher in 1999 than 1990, after adjusting for inflation and population growth.
National Taxpayer Union policy analyst Jeff Dircksen (cq) has called the proposed sales tax hike, "a clumsy attempt to cloak the Commonwealth's massive spending growth in a mantle of legitimacy." Dircksen says taxpayers would be better served by addressing transportation needs within the current budget, reallocating funds from less important programs (good luck getting politicians to agree on that) and reexamining privatization and contracting-out services.
The answer to Virginia's problem and those of other state governments and the federal government is found in a study by the Congressional Joint Economic Committee. Between 1960 and 1993, the committee says, the economies of states with low or flat income taxes grew nearly one-third faster than those of states that imposed punitive taxes on income and investment.
And, as is always the case, economic growth produced more tax revenue for state treasuries because there was more money available to be taxed. The people should be allowed to vote on reduced spending, not higher taxes.
If Gov. Warner and the Republican legislature want to boost sales taxes for roads and education (there is no correlation between the level of spending on education and achievement), let them lower the income tax rate and finish the phase-out of the hated car tax, which former Gov. Jim Gilmore promised but was unable to eliminate.
One of the oldest economic truths is that taxes should never be raised during a recession. It's no surprise that a Democrat wants to raise taxes any time. Republicans who go along don't deserve the name.