|
|
The
late, renowned New York Times theatre critic, Brooks
Atkinson, apparently entertained deeper thoughts
than which Broadway musicals would sink or swim, for
it was he who wrote (in Once around the Sun,
1951), “The power to tax is the power to rule.”
The
General Assembly has returned to
Richmond
for its annual session, this one to be at least 60
days long. I say at least 60 days, because the vital
and extremely thorny issue of tax reform is upon the
General Assembly and there is a 50/50 chance that
the house members and senators will not complete
work on an acceptable plan in the regular session.
If, as is likely, that should happen, Gov. Mark R.
Warner has threatened to call the General Assembly
back for a tax session. A special session would
likely happen in April.
Two
major tax-raising proposals have surfaced in Richmond.
Each would raise over $1 billion additional money
for the bureaucrats to spend, taken from the
paychecks, pocketbooks and pockets of Virginia
citizens. I don’t believe the tax-raising
"reform" bills proffered by Gov. Warner’
or Sen. John H. Chichester, R-Stafford, will pass
the House. Speaker Howell, our leadership and the
majority rank and file are all devoted to some tax
reform but all are adamantly opposed to raising new
tax money this year.
I
have spoken with Delegate
Vincent Callahan, chairman of the House
Appropriations Committee, about the Commonwealth’s
financial needs. He has assured me that the ongoing
sharp upturn in Virginia’s economy plus current increases in General Fund
revenues will provide our state government the
necessary tax revenues without raising rates.
I
have been a member of the last three General
Assembly tax reform commissions. Over those years,
working with our General Assembly tax attorneys, I
have researched and reflected upon how the Virginia
tax code could be made simpler and updated and how
our entire tax collection system could be made
fairer. Many of my consistent readers might remember
four years ago when I as appointed, as a freshman,
to the House Finance Committee — the taxation
committee. Then-Speaker Wilkins appointed me to
Finance primarily because of my 18 years of
experience as an audit investigator with the General
Accounting Office, in Washington. In a little over four years I have become a senior
member of the House Finance Committee. All of this
is a preface to tell you that I have introduced HB
108—Tax Reform and Income Modification, or TRIM —
a commonsense, revenue-neutral reform and
simplification of Virginia’s very complicated mix of tax burdens on our
citizens.
TRIM
would exempt from Virginia
taxation the first $15,000 ($30,000 per filing
couple) of Federal adjusted gross income. This will
be of particular assistance to folks on fixed
incomes and the working poor. Obviously, the rest of
us will also get a tax break. It will also save the
state approximately $13,000,000, assuming it costs
$10 to process a tax form and mail back a refund,
because 1.3 million tax returns would no longer be
filed. Income rates at the high end will be raised
slightly.
Exempting
the first $30,000 of a joint filing would cause a
$460 million shortfall in Virginia’s budget. How to fill that hole? I have long
reflected on our current sales tax status whereby a
hammer purchased at the neighborhood hardware store
incurs a 4-½ percent sales tax but a haircut next
door at the barbershop does not -- irrationally,
since barber shops often sell grooming supplies on
which the sales tax is collected. It makes no sense
to me that if you purchase lawn fertilizer and apply
it yourself you pay sales tax but if you hire a
maintenance company to spread it for you no sales
tax is paid. In my view, we should either charge the
sales tax fairly or abolish it. My bill would lower
the sales tax to 4 percent and spread it to
services. I would also abolish to sales tax on food.
Gov. Warner’s and Senator Chichester’s bill
would raise the sales tax on the goods you now buy
but leave the lawyer’s fees, theatre tickets, hair
cuts and other services free as a bird from
taxation.
God
willing, I will be on the dais of House Finance
Subcommittee # 2, which will first consider all of
the tax bills before the House -- and, later, those
that pass the Senate -- when my bill, and all
others, come up for consideration and votes. I
promise I will work diligently to see to it that any
tax reform bills passing through the House this year
will be (1) revenue neutral (2) fairer and (3)
provide a simpler Commonwealth tax system than the
one we have today.
--
January 19, 2004
|
|
