Think Progress

Sure, the taxes here are higher than in Somalia and in Papua New Guinea. But are they the best yardsticks against which to judge?

As a percentage of GDP, U.S. taxes are lower than almost every other developed nation in the world. Only Chile and Mexico are lower.

From Think Progress:

The premise of the argument from Republicans is that Americans already face an extraordinarily heavy tax burden. Citizens for Tax Justice, however, compared levels of taxation in 2010 in the other industrialized countries that make up the Organization for Economic Cooperation and Development (OECD) and found that the U.S. not only collects far less in tax revenues than the average OECD country, but that it also collects less in taxes as a share of its economy than all but two other OECD nations, as the chart at right shows.

When are the RWers buying their plane tickets for Juarez and Santiago?

MrPrada | Wikimedia Commons

Note from Dan: After decades of twiddling its thumbs over transportation funding, Gov. Bob McDonnell and the Virginia General Assembly enacted a very flawed but necessary transportation funding scheme this year. It increases the general sales tax and  bunch of other taxes and fees on fuel and vehicles. It does away with the per-gallon tax but replaces it will new wholesale taxes. Instead they should have increased the per-gallon tax and indexed it. Here’s the last big scheme Gob. Bob put forth, from a column that originally ran Sept. 9, 2010.

Gov. Bob McDonnell was unequivocal in his January State of the Commonwealth speech:

“We will not turn our economy around by taxing Virginians more. … Therefore, if you pass a bill in this recession that raises taxes on the hardworking families of Virginia, I will veto it. And if you pass a budget embedded with those same tax increases, I will not approve it.”

Now McDonnell seems to have changed his tune when it comes to privatizing Virginia’s state-controlled liquor industry.

Although his administration took pains to deny it at an announcement Wednesday, the various levies McDonnell is proposing as part of his complex privatization plan look, sound and act like new taxes. Read more »

ThinkProgress.org

This chart came from this post.

Osvaldo Gago | Wikimedia Commons

Already, it’s brilliantly clear that Virginia’s grab-bag-of-taxes solution to a decade-long transportation funding crisis is unbelievably and needlessly complex.

The prime thing it seems to accomplish is that it gives Gov. Bob McDonnell bragging rights to say that he’s the first governor in the history of the nation who “abolished the gas tax” — the retail version, anyway. That may prove a useful resume-builder for his future in national politics

The plan replaces the retail gas tax with a wholesale tax that will certainly be passed onto consumers (and which is even higher for you diesel drivers, sorry!); raises the state sales tax, the vehicle transfer tax, and imposes local-option sales taxes for transportation, higher hotel taxes in Northern Virginia and some more fees and taxes.

The bill is 109 pages long, and they could have fixed the whole issue, mostly, by changing two digits in one line — 17.5  27.5 cents per gallon — and indexing the tax to inflation in the next sentence.

Now we have another question, raised in today’s Washington Post. Former Virginia Democratic Party Chairman Paul Goldman and Norman Leahy, editor of the right-leaning BearingDrift.com, ask: “Is it unconstitutional.” They seem to answer yes: Read more »

qJake | Wikimedia Commons

Note from Dan: Lots of people have been wondering why on Earth Gov. Bob McDonnell wants to kill the gas tax, but at the same time implement a new $100 a year tax on hybrids. I simply assumed some cynics in a Richmond conference room came up with this idea after one of them said, “How can we stick it to those environmentally conscious wackos who never vote for us?” But Bill Carstensen of Blacksburg has given it more thought.

By Bill Carstensen

I have been searching for a good reason that we hybrid owners should pay more to register our vehicles than others under the new “no gas tax” plan (gee, that sounds a lot like “no car tax” doesn’t it? That certainly went well for the state treasury).

Here is the plan’s logic as I see it:

Spread the cost of building and maintaining roads to all who spend money in the state through a sales tax increase and a removal of the state gas tax.  I can go for that, at least in principle, as we all benefit from roads whether we use them personally or not. Someone uses them to bring us most of what we own and what we eat. For added revenue, charge a bit more to everyone who registers a vehicle in Virginia.  I can also see that plan as we all should pay toward the roads we drive on through registration fees.

And, best of all, for more added revenue, charge a special rate of $100 per year to those who have made the decision to drive hybrid or electric vehicles (Virginia was 8th nationally in such registrations in 2009 so I am certainly not alone here).  So, let’s try to understand the economics of the last part of this decision. Read more »

Wikimedia Commons

Your daily Letter to the Columnist — Jan. 25, 2013

Hello sir.

I have re-read your article from this past Sunday, “Reactions to McDonnell’s gas tax plan mixed.” I own a 2005 Ford Escape hybrid and am frustrated that Virginia wants to charge an extra $100 for owning a hybrid.

I purchased this vehicle for many reasons, two of which are saving gas and to be at least somewhat environmentally friendly.  In the past, there have been tax cuts for owning a hybrid as an incentive to purchase. Granted, $100 isn’t much, but they should be giving a cut instead of adding a charge.

The Escape Hybrid uses much less gas and weighs less than a standard Escape, which translates to less wear on roads.  Localities such as Nags Head, N.C. reward hybrid owners by providing a parking space closest to the front door of a local Food Lion.

They shoould do similar in other areas to encourage hybrid ownership. I am against the proposed changes in the Virginia gas and sales taxes. We will be paying more taxes over time with the changes.

Scott Fowler
Hardy, VA

Wikimedia Commons

Your daily Letter to the columnist — Jan. 21, 2013

Dan,

Just wanted you to know that you did a great job on the gas tax etc on Sunday.

Two issues Gov. McDonnell  has not addressed to my knowledge: Currently 20-25 percent of our gas tax is paid by out-of-state buyers traveling through the Commonwealth. I like them sharing our costs.

With the Gov’s plan all that would be paid by Virginians, leaving about 3$00 million on the table for us to make up if my memory of the numbers is correct.

Also, what keeps the gas companies from raising the price after no gas tax is in effect to match the price of surrounding states so gas is pretty uniform?

With states all around us having higher gas taxes than we do, do you see that much difference in the cost of fuel when you visit there? Not in my trips north, south and west of the Commonwealth. Just thought I might throw these out as I am not sure the no tax Gov or his staff has thought this out yet.

As you might know as a transportation person all my life I have significant interest in this and just hope we find some way to fix our roads and do for Virginia what is desperately needed.  I still believe we do not want to increase the burden on Virginian’s when we can gain a lot from our millions of out of state visitors.

Bev Fitzpatrick
ROANOKE

Savannah, Ga. | Lukelastic | Wikimedia Commons

The price of regular gas is around $3.15 per gallon, give or take. I bet you’d like to see that dip below the $3 mark, right? Who wouldn’t?

That’s one of the things Gov. Bob McDonnell is counting on with his eyebrow-raising proposal to end once and for all Virginia’s 17.5-cents-per-gallon tax on gasoline in order to solve Virginia’s long-running transportation-funding problems.

But reaction seemed mixed among Roanoke Valley motorists last week shortly after McDonnell trotted out the idea. I drove around town and pestered them at the pumps for their thoughts.

Before we get to those, here’s a brief outline: McDonnell would end Virginia’s tax on gasoline (but not diesel fuel) and he estimates that will save Virginia motorists $3.5 billion at the pump over 5 years.

To replace that lost revenue, the General Assembly would increase the general sales tax from 5 percent to 5.8 percent. That would apply to clothing, food at restaurants, furniture, appliances, autos, and just about any other item you purchase other than medicine or groceries or vehicle fuel. The current 2.5 percent sales tax on groceries would not increase.

READ THE REST OF THIS COLUMN HERE.

Daryl Mitchell | Wikimedia Commons

This afternoon Gov. Bob McDonnell unveiled an eye-opening plan he said would solve Virginia’s transportation funding woes once and for all: He wants to abolish the 17.5 cents-per-gallon gasoline tax and replace it by raising the general sales tax from 5 percent to 5.8 percent.

Because I may be doing a column about that proposal soon, I’m interested in your thoughts about it.

McDonnell says this will raise more than $500 million each year for transportation infrastructure projects in Virginia, which have been sorely hamstrung in recent years. Of course, that’s because the legislature irresponsibly  hasn’t raised the gas tax since 1987.

From the governor’s email:

“That’s right, no more gas tax at the pump. No sales tax at the pump either. When this plan passes the price of gas will go down, and Virginians will spend $3.5 billion LESS at the pump over the next five years.

“We then propose increasing the sales tax from 5% to 5.8%, still below every neighboring state and the District of Columbia, and putting that increase into transportation from here forward. The advantage of that change? We’re ensuring that transportation receives the new funding it needs in the years ahead by tying it to a mechanism that moves in tandem with economic activity and inflation. That is how every other tax works. That is what will make transportation funding sustainable again. Read more »

. . . and they’re trying to blame the Senate

Goodlatte: “While the House voted to cut spending and prevent tax hikes, the Senate repeatedly failed to act. As we ring in yet another year, it frustrates me and the people of the Sixth District that this issue has once again been punted further down the road.  We must proceed with serious spending cuts that will get a handle on our debt crisis, balance the budget, and foster economic growth.”

Griffith: “Reasonable people can disagree whether or not to support this Senate compromise. . . In reviewing bills, I look at the short-term as well as the long-term consequences because they will affect our children and grandchildren for years to come.  Passing a bill that raises revenues with only minor cuts is not a balanced approach.”

Hurt:  “The United States Senate failed to take seriously this crisis, driving us to the edge of the cliff with its 11th hour vote on Tuesday morning. . .  The Senate proposal provides permanent tax relief to most Americans, and I believe that is a step in the right direction toward creating certainty for our families and small business owners. . . [But]at a time when members of both parties agree that we need to cut spending, the Senate proposal makes virtually no spending cuts.”

Read their full statements over on Blue Ridge Caucus, in which they attempt to explain why they voted to go over the fiscal cliff.

Here’s the full roll-call vote.