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A treatment for taxophobia: The facts
DOES BILL CARRICO know how much trouble he's in? Beltway ideologues plan to run primary opponents against the Grayson County delegate and 16 other Republican House rebels (Mr. Carrico, ironically, lives in the community of Independence) who cracked the state budget deadlock by backing a half-cent jump--to a grand nickel on the buck--in the sales tax.
Granted, the anti-tax Norsemen until lately would have had trouble finding, let alone swooping down on, Grayson County, in Southwest Virginia, or anyplace in the state much south of the Metro Blue Line. But recently they've unfurled their maps and ventured all the way down I-95 to Richmond to harry GOP lawmakers who believe in public investment. Too bad, then, that one of their own crew--the conservative, D.C-based Tax Foundation--has drilled a hole in the bottom of their longship.
In a new report, which ranks state and local tax burdens as a percentage of income in the 50 states, the foundation puts Virginia at No. 37--down a notch since 1999. "Over the past 14 years," adds the foundation's Web site, "Virginia's tax burden has consistently been among the lowest in the nation." State and local taxes, the low-tax advocacy group figures, take 9.3 percent of Virginians' income, versus a national average of 10 percent.
This datum, based largely on federal reports and echoing the findings of the nonprofit Federation of Tax Administrators, helps clear up a debate between GOP anti-tax zealots and their conservative brethren (that is, Republicans who would conserve Virginia's civic resources and its manifold reputation for excellence). The former claim that Virginia is already a borderline high-tax state and that the revenues sought by the Senate ($2.4 billion over two years) would make us the New York of the South. The latter argue that the Old Dominion's levies are low and that spending what's needed to boost and maintain the state's educational, health, and transportation assets would leave our tax load still moderate.
The Tax Foundation, weighing only state and local taxes, supports Main Street Republicans. For example, Virginia's corporate taxes are the ninth lowest nationally; in 2001, only nine states raked in less per-capita from these firms. Virginia's gas tax ranks 37th, and its 2.5-cent-per-pack tax on cigarettes--raised 30 cents under the House plan narrowly approved Tuesday--is infamously 50th. Most telling is our sales-tax standing. Of the 46 states with such a tax, just nine have rates lower than Virginia's 4.5 cents on the dollar, while 33 impose higher rates. Does any of this sound like the Virginia taxpayer is being skinned alive?
Of course, local and state taxes, as the calendar so roughly reminds us, don't tell the whole story. There is also the federal bite, and in Virginia it's huge. All taxes taken together earn Virginians not a No. 37 tax-burden ranking, but a No. 19. Perennial bell ringers for more state largess never include that fact in their talking points and bar graphs. However, it's important to ask why federal taxes hit Virginians so hard. The answer is that we are "victims," by dint of our prosperity, of the bracketed income tax. In 2002, only 11 states could boast of higher per-capita personal income, says the Census Bureau. Moreover, Virginians get back $1.50 in benefits for every dollar they send to Uncle Sam, ranking 12th nationally in that category, notes the Tax Foundation.
Conclusions? (1) The residents of an affluent state, in need of greater funding in core areas, are relatively lightly taxed by their state government--a point the Senate should ponder as it studies the House's bold, but insufficient, tax bid. (2) The Beltway Norsemen should swing their broadswords within the Beltway, lair of the true predator on Virginians' wealth. Besides, the Capitol is easier to find than Grayson County.
