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Ready,
Aim, Shoot Foot!
What
gives with the Virginia business leadership's
support for higher taxes? Taxes kill jobs. And the
state hasn't begun to exhaust cost-cutting
measures.
There
is an obvious disconnect between what Virginia
business leaders say on national tax issues and what
they say on state tax issues. One of their own —
John Snow, who just months ago headed CSX
Corporation in Richmond — is now the Bush
Administration’s point man on tax policy. Has
anyone heard them criticize Snow’s strong advocacy
of tax cuts?
The
tax cuts narrowly enacted by Congress this year are
just beginning to stir a sluggish economy. If the
states raise taxes next year, they will effectively
reverse the national initiative to stimulate the
economy.
Has
anyone heard Virginia’s business elites
acknowledge this possibility? These leaders are
either willfully blind or exceedingly cynical.
These
leaders would not run their businesses the way they
expect state government to operate. Unless a
business is a monopoly, it can’t continue to raise
its prices indefinitely. Yet, their answer to rising
demand for state services is, reflexively, a big tax
increase.
No
effective manager in the private sector would accept
uncritically in his own business the kind of
conclusory statements about “staggering” funding
needs that daily emanate from editorial writers,
some legislators and interest groups who are pushing
for higher taxes. He would insist on hard analysis
of those claims.
Even
if those claims were true, he would not limit his
thinking to raising prices as a solution. He would
look at other ways of meeting the challenge through
innovation or cost reduction.
For
some reason, most businessmen stop thinking like
businessmen when they enter the realm of government.
Instead of applying the lessons of free enterprise
to problems confronting government, they cling to
stale assumptions that many average citizens are
quite willing to challenge.
Why,
for instance, must governmental programs continue on
automatic pilot? It’s long past the time when some
of these programs should have been reexamined.
Take
higher education as an example. College presidents
claim that tuition increases are the inevitable
result of state budget cuts during the last two
years. Has anyone questioned why the cost of
educating students at our public colleges and
universities continues to rise at a rate far higher
than the rate of inflation and population growth?
Look
at another state government program that many
business leaders insist needs higher funding —
transportation. Our current system is grossly
inefficient. Instead of relying on market forces to
hold down costs and make the system more efficient,
these business leaders want to raise taxes to fund
the same old system. How about some bold thinking?
The
biggest claim on state taxpayers’ pockets is
public education. Here again, the refrain from
Virginia leaders and their champions in the
governor’s office and the legislature is lay on
more taxes.
When
program costs rise faster than Virginia’s economy
is growing, as they have in public education, we
have to ask how long we can continue the same
pattern. Asking that question is all the more
important when educational quality is not rising
apace with total spending on schools.
Finally,
why would a businessman, of all people, want to
change Virginia’s pro-business climate for the
worse? As U.S. Sen. George Allen noted in his recent
letter to The Washington Post, “the most
effective revenue-raising program is — and always
has been — economic prosperity in the private
sector.”
Allen
had it right. Higher taxes kill jobs. Virginia
doesn’t need that medicine.
-- August
25,
2003
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