Bacon's Rebellion

Democracy Thrives in Sunlight

Another Reason to Worry about the G.A. Transportation Plan

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by

James A. Bacon
in

One of the regional taxes embedded in the General Assembly’s transportation funding package is a five percent service fee on automobile repairs. I suppose the logic is that the levy can be characterized as a “user fee” on automobile owners rather than a tax, which it really is.

This tax is very worrisome. Applying a fee for services is a Rubicon that Virginia has not yet crossed. As a correspondent who works for a major state trade association points out: “We have not applied taxes to services provided in Virginia. This precedent of applying fees on a service is a dangerous one, opening the door for taxes on lawyers, accountants, or day-care.”

Everyone in the service sector of the economy — and that includes writers like myself — ought to be afraid… very afraid.

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One response to “Another Reason to Worry about the G.A. Transportation Plan”

  1. Anonymous Avatar
    Anonymous

    Virginia put one foot firmly in the Rubicon, but perhaps didn’t cross, when it applied the 5 percent sales tax to all forms of telecommunications services last year. In that case, there were other taxes already in place on telephone services which were repealed in a trade-off, so it was not an untaxed service. But there were also some untaxed related services (satellite TV and radio, long distance telephone, VOIP) that had not been taxed before but got sucked in to provide a level playing field (and sufficient local revenue.)

    As Seinfeld would say, not that there is anything wrong with that. It’s the coming thing, especially if we continue to rush away from property-based taxes.

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