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I want to pay my fair share of taxes, not a penny less, nor a penny
more.
No one likes to pay taxes, but if there is
something Virginians can generally agree on it
is the simple idea that everyone should pay
his or her fair share.
We should not leave it to others to
carry an unfair burden for the costs of
schools, public safety, health care, roads,
and the other necessities of a strong and
vibrant Commonwealth. To believe otherwise is
more fitting to a feudal society, where the
privileged enjoy services at the expense of
the poor – a concept repulsive to the
Jeffersonian ideals that form the bedrock of
the Commonwealth.
While equality regarding tax burden is a popular idea, it is too
often missing in Virginia’s tax code today.
Over the course of many years,
Virginia’s tax system has grown regressive.
It is riddled with special-
interest exemptions and unfulfilled promises to our people.
The tax brackets for our lowest-income
citizens haven’t been changed since 1926.
Consider this fact: In the Commonwealth today, a custodian or day
laborer trying to survive and provide for his
or her family on $18,000 per year is taxed at
the same rate as the wealthiest corporate
executive in Richmond or Northern Virginia.
To make matters worse, the poor and
middle-class families of Virginia shoulder a
larger tax burden than those with similar
incomes in most other states. The
wealthiest Virginians, by contrast, face a
smaller-than-average tax burden.
Restoring fairness to Virginia’s tax code is one of the principal
goals of a special tax reform plan Governor
Mark Warner unveiled in Richmond last month.
As one of the governor’s informal advisors
on this critical issue, I am extremely proud
of the plan he is submitting to the
legislature. It
promotes fairness in several important
respects.
First, it adjusts the lowest tax brackets to raise the filing
threshold for Virginia’s neediest citizens
from $5,000 to $7,000 per year.
And while that change will mean that
everyone pays less on the first $20,000 of
income, it is particularly beneficial to
low-income and middle-class families.
Second, the proposal raises the personal exemption from $800 to
$1,000, which again is helpful to working
families with children.
In addition, the governor’s plan
raises the standard deduction from $3,000 to
$4,000 for single people and from $5,000 to
$8,000 for married couples, thus ending
Virginia’s marriage penalty.
Third, the plan continues to phase out the sales tax on food,
reducing it 1.5 cents between now and 2005.
The bill also closes tax loopholes,
reforms the estate tax, and continues the
phase-out of the car tax.
Like any plan for broad-based, comprehensive tax reform, the
Governor’s plan means some taxes will go up.
The sales tax on goods other than food
will rise by one cent, and the plan creates a
new top tax bracket of 6.25 percent for the
wealthiest Virginians.
In addition, the state’s
lowest-in-the-nation cigarette tax would
increase from 2.5 cents per pack to 25 cents
per pack.
But at the end of the day, when the increases are balanced against
the tax cuts, most Virginians will pay less in
taxes to the state than they do today.
In fact 65 percent will pay less.
That’s good news for middle-income
families here in the Roanoke area and
throughout the state.
There are other benefits to the governor’s plan.
By updating our tax code, the plan
ensures that we’ll be able to meet our basic
commitments to elementary and secondary public
education in Virginia, which will carry an
additional cost of at least $715 million in
the next two years.
As an educator, I can attest to the
value of a smart, well-educated and
well-trained workforce in our ability to grow
economically and enjoy a better quality of
life. If we under-fund education, we do so at
our own peril and severely compromise
opportunities for our children and
grandchildren.
Finally,
by updating our tax system – and making it
fair – Virginia will at last climb out of
the fiscal hole that we’ve been in since the
collapse of the “dotcom” economy in the
late 1990s. The
governor and the legislature will still have
to exercise fiscal restraint, and additional
budget cuts will no doubt be needed.
But by having a more stable and fair
tax system – one that meets the core
responsibilities of government – we will no
longer be teetering on the edge of financial
collapse. We
will be able to move Virginia forward in a way
that will meet the competitive challenges of a
new economy.
In case you’re wondering, I will be among those paying more taxes
under the governor’s proposal. Am I happy
about that? Not particularly.
But I am convinced that it is fair; and it is the only way to be fair to the 65
percent of Virginians who live on middle- or
lower-incomes and currently pay an unfair
share for the many services we all enjoy.
--
January
5,
2004
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