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Mason Conservative

I think, given the terrible direct burden the car tax is for folks who don't make much (like me) I would be willing to swallow almost anything to get rid of it. I mean, even an income tax hike to some degree would be easier to deal with because its taken right out of the paycheck every check, and thus could be paid smoothly over the entire year. I know conservatives will hate this idea, but the state needs this tax money, and we have to accept that some tax will have to be levied. I like Gov. Gilmore, and I wish he would have gotten his way in eliminating the tax, but shifting the burden to the state was just a bad idea, in hindisght.

Or maybe a tax on new and used cars? Something like that, you know?

Spank That Donkey

Thanks for chiming in Ben, and Mason. I pretty much am a "die hard" conservative, and I abhor taxes in general, but this latest measure by the GA, has me flabbergasted.

The question that needs to be answered is what happens to unappropriated funds due to deliquency at the locality level? Do they remain in the General Fund, or can another localitiy with a lesser delinquency rate claim them?

If the GF keeps it, and if just 1% of the 950M or 9.5M stays unapropropriated, this is very bad indeed.

Hey Mason, can't we find some savings on the Govt. side of the ledger, in light of the $1.5B tax increase, which still saw a $1.2B surplus over and above move into the State Coffers?

Jaded JD points out quite clearly http://www.spankthatdonkey.com/spankthatdonkey2/2006/7/27/gov-va-general-assembly-screw-the-poor.html#comments

"First, while you're correct that the poor benefit most from the car tax relief program, that's because it's a wealth transfer program and not a tax cut".

Not Larry Sabato

Spank That Donkey,

It's easy to throw out numbers and call for a cut. It's harder to make the cut.

You want to know how we can lower the government workforce in Virginia the most- at once? Pass an additional 1% income tax on people making $125,000+ a year- send the money to local governments to make up for the car tax- and eliminate the car tax and all the people who administer it from the local payrolls.

And it's all revenue neutral. How simple is that?

Libertas

I GOT IT!

We need a tax for folks who have millions and die! I mean they can't take it with them, and the folks they leave it to didn't work for it. We should call it the inheritance tax. It is progressive because it will only affect those who can afford to pay it in the first place.

i bet I get Warner of the Week on this one....

Not Larry Sabato

Libertas- the inheritance tax only brings in 140Million a year- eliminating the car tax is a Billion Dollar plus problem (it costs 0.95 billion just to eliminate 70% of the tax on the first 20,000 in value from 2002 levels- its probably another billion just to do away with it).

Also, on my other comment, let me add a correction. While it is revenue neutral- it is not neutral to expenses, that plan would CUT expenses by eliminating unneeded jobs.

Not Larry Sabato's Lawnboy

Yo Holmes the estate tax sucks! Think about the businesses. Its not a tax on just straight cash. Its on the business land and the building and so on....

Spank That Donkey

NLS:
Are you sure you are just not making those #'s up? You are saying increase the top State Income tax rate by 1%? And that makes up the car tax revenue?

Anyhow, that $950M is likely to grow each year, which only gives me pleasure, each year the GA has to figure out how to send more $ to the localities...

I almost look at this like Nixon's "Block Grant" program, whereby excess Fed $$$ is sent back to the States.. although there were all kinds of strings attached, and Lord knows, buracracy :-(

Truly, why can not the state budget only increase by inflation +2% every year? These guys spend everything they get in, minus the rainy day fund...

I'm not missing anything am I?

Kenton Ngo

Well, I'm all for a progressive system (and the estate tax), and if a 1% increase can get rid of this whole debacle, then great.

Not Larry Sabato

STD, I believe those numbers are correct, although they may be a little dated from 2005 when I was using them in my campaign. A 1% income tax on the highest incomes in Virginia can make up for the entire tax as I recall.

Kenton Ngo

Tossing out the obsolete Dillon Rule would go a long way to solving this problem. Then we could get rid of this whole debacle and localities can come up with ways to fund themselves. I find it strange that Virginia insists on tying down the counties.

Spank That Donkey

Kenton:
I like "Dillons Rule", it ties in with the "tiebout" theory of being able to "vote with your feet". If you do not like what is going on in your locality you can move.

Also remember, that the "Dillons Rule", moderates a locality from getting to extreme, whereby there is a "check and balance" at the state level.

Then again, cities and counties for that matter can disappear, or appear at the "whim" of the GA.

Rest assured, when that "Body" meets, we should all "shake, shiver, and pay attention"

J. Sarge

STD,

The Dillon Rule has its pluses and minuses, but your argument has me confused. You say that "If you do not like what is going on in your locality you can move." If, under the Dillon Rule, counties can't raise their own revenue outside of property taxes (read: real estate), what choices do the various counties have? Where are you going to move? To another county that is equally restricted in how it raises revenue? Am I missing something in your argument?

Let's say I live in Campbell. I dislike the real estate tax. I move to Craig. Which imposes . . . a real estate tax. That hardly seems to solve the problem.

Are you saying that a person can just move from county to county to find the lowest real estate tax burden? That seems like a weak argument. Then again, so does the entire "vote with your feet" line of reasoning. Your only choice is to get out? "I hate the tax structure in Loudoun. To show my displeasure, I'm moving to Guam." Hmmm . . .

It seems to me that loosening the reins on localities might allow them the ability to experiment. A little income tax? A little meals tax? Could not the best system then be emulated by the rest of the localities, each with its own tweak?

Of course, those who believe all taxes are bad would be put in quite a bind. Rather than simply quash such measures in the GA, they would have to push their agenda in 134(?) jurisdictions . . .

Don't get me wrong, allowing unfettered taxing powers to the localities seems like a bit much, put a capped experimental period with a jusrisdiction or two might prove instructive, no?

brimur

J.Sarge- I think you make an interesting argument. But the whole point of the Dillon rule is to prevent the confusion and contradiction of allowing local governments too much flexibility in their governing power. I for one do not like the idea of having to re-learn a vastly different tax system every time I move. Sure it allows for experimentation (very similar to the argument for states as laboratories) but we live in the 21st century. A hundred years ago you lived in a community all your life and therefore would not have been exposed to the difficulty of navigating the vast differences among systems. Today those difficulties would be intense.

The experimentation of a system and the resultant benefits must be balanced against the clarity and predictability provided by the Dillon rule. On balance, in today's world of commuting and changing jobs every three years I think the Dillon rule is needed now more than ever.

Not Larry Sabato

All this serious policy discussion- what is this- Bacon's Rebellion?

Vivian J. Paige

The Dillon Rule needs to be scrapped. The localities are handicapped by the inability to make local decisions without first getting permission from Richmond. The other side of this is that it allows the electeds in localities to ignore the desires of it citizens by hiding behind it.

Having all of the power vested in the legislature is why we see candidates spending huge sums of money to get elected. Not for the money the job pays, but for the power it gives them.

We need to dump the Dillon rule now.

brimur

I think the effect of the Dillon rule is often grossly exaggerated. And yes Vivian, pols hide behind it. But making excuses is what politicians do best, if it wasn't the Dillon rule it'd be something else.

Informed Patriot

Don't localities in NoVA have the ability to raise their income tax levels? Has a single locality chosen to raise them and stop whining about lack of state funding?

"Informed" Patriot -

You may want to try a bit more diligently to live by your moniker -- because you are clearly NOT "informed".

Localities in Northern Virginia have no such authority.

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