Warner outlines tax plan/ (raise sales tax/increase cigarette levy)

Richmond Times Dispatch ^ | Nov 24, 2003 | MICHAEL HARDY AND JEFF E. SCHAPIRO

[putupon]

Gov. Mark R. Warner today will propose raising the state sales tax by a full percentage point - to 5.5 cents on the dollar - as well as easing taxes on low-income Virginians but hitting the rich with more, government sources said.

[putupon]

Warner seeks to modify and pare the state's generous tax deduction for senior citizens........But Virginians who qualify for the break in the future would receive a deduction tailored to their income

Translation: Penalize those who prepared for retirement.

he will disclose a plan to limit the state tax on the estates of the wealthiest Virginians. In effect, he significantly scales back the costly plan the GOP legislature passed last year, which he vetoed as a tax break for millionaires

Death tax stays for anyone above $X amount, reduced for lower incomes just for show. Again,penalize success.

[putupon]

ping

[JackOfVA]

And I suppose he thinks this is his ticket to the Senate?

My neighbors in Fairfax County will support higher taxes, I suspect, even though most of the increased money will go to Richmond.

Jack

[xeno]

This Fairfax county resident will NOT support them! :-) The proposed transportation tax for Northern Virginia was soundly defeated last year, despite all the pundits. I hope this proposal will fare the same.

[ngc6656]

Ping!

Now we know.

[PistolPaknMama]

without some sort of reform, costs will exceed revenues

These fruitcakes just don't get it. If MY costs exceed MY revenues then I have to stop spending. I don't have the luxury of stealing from my fellow citizens to support a budget I can't afford! Politicians obviously never had a financial planning course.

[Corin Stormhands]

It will be headed by Judy Peachee Ford, a Republican who last year ran the successful effort to persuade voters to support $1 billion in bonds, primarily for higher education.

I know Judy Peachee Ford. John Chichester is more of a Republican than Judy Peachee Ford. She left us a long time ago.

Forget the Senate, the RINOs will push for this. This has to be killed in the House.

[HankReardon]

I lived in Northern Virginia from '81-'87, could not believe the taxes then! Was shocked that they tax food! And the personal property tax, paid taxes on the money when we earned it! C'mon people, the problem is that these governments have too much money! The more you let them take, the large the government gets.

[ngc6656]

You tell'em, Mama.

Politicians obviously never had a financial planning course.

But they do have a plan: pad budgets each year so they exceed the projected revenues. Then, with much handwringing, go to the taxpayers and tell'em they gotta ante up more money.

[iceskater]

Thanks for the ping. I skimmed the article in the paper this morning.

I am so appalled, I don't even know where to start. I guess I'd better start with some emails to my reps in the General Assembly. This whole plan is outrageous.

[JackOfVA]

I hope that you and I are not the only ones with that view.

Every election, however, when Fairfax voters approve another $250M school bond by 75% majorities, I wonder if I am the only one concerned about out-of-control spending.

We live out near Clifton, by the way.

Jack

[sultan88]

"To pressure legislators during the assembly session beginning Jan. 14, Warner and allies are ready to raise $2 million for a full-bore public-relations campaign."

Well that means it's time to start our own "public-relations" campaign. And we will do it without spending $2,000,000.00.

[Corin Stormhands]

But they still don't get it. Voters were okay with bonds for "education" and parks. But they overwhelmingingly voted AGAINST sales tax increases for transportation in NOVA and Tidewater.

Lowering the sales tax on groceries is all smoke and mirrors.

[putupon]

Lowering the sales tax on groceries is all smoke and mirrors.

as is the graduated death tax.

[AdSimp]

Here is Warner's letter to us today:

Dear Colleague:

For almost two years, I have worked as your Governor to restore Virginia's fiscal integrity and economic strength. Toward that end, we have closed budget shortfalls totaling approximately $6 billion and instituted the most sweeping reforms of state government in a generation. State employees have been full partners in our efforts to achieve these important reforms. We have also made public education a priority, instituting innovative new ideas in areas ranging from pre-kindergarten instruction to workforce training.

Today in Richmond, I will be announcing a plan for tax fairness that builds on our record of reforming state government and providing new economic opportunities for our people. I want you to have this information as I make the public announcement.

Tax reform has been the subject of numerous studies and blue-ribbon commissions over the years but, unfortunately, little has happened to achieve the goal of a fairer tax code. Our plan will change that. It achieves three principal goals:

· Tax fairness for working people. Under our plan, 65 percent of all Virginians will pay less taxes than they do now. Most families will see their tax bills drop because we propose to lower their income tax burden by expanding the lower tax brackets, increasing the personal exemption to $1,000, the standard deduction to $4,000 for single filers and $8,000 for married filers. We will also complete the phase-out of the car tax over the next two budgets, lower the sales tax on food, and eliminate the estate tax for working farms and closely held businesses.

· Meeting our commitments to education. This plan ensures that Virginia will have the revenue it needs to properly fund the state's commitment to education through the Standards of Quality and to reverse funding declines for higher education. Our plan provides an additional $855 million to public education and higher education. Without this additional funding, we will be unable to meet the demands of growing enrollment, and localities will face continuing pressure to raise real estate taxes.

· Preserving the fiscal integrity of Virginia. Virginia faces a $1.2 billion shortfall in its budget for the next two years. Moreover, our projections as well as those done by General Assembly committees show that even with an economic recovery, Virginia will face continuing budget shortfalls through the end of the decade. Without the revenues provided for under this plan, we will only be able to close the shortfall through unprecedented cuts in services to Virginians in education, health care and vital human services. Without this plan, Virginia may well lose its coveted AAA bond rating, which saves taxpayers millions of dollars each year in reduced borrowing costs. Virginia has held this rating since 1938, longer than any other state.

The tax reform plan we are announcing today lowers the overall tax burden on two-thirds of Virginians but still generates additional revenue for the Commonwealth. It includes a 22.5 cent per pack increase in the cigarette tax and a one cent increase in the sales tax, and it restores fairness and balance to the income tax by lowering taxes for all filers on the first $20,000 of income and creating a new 6.25 percent bracket for tax filers with taxable incomes over $100,000, which is less than 8 percent of all filers. In addition, our plan eliminates a common tax loophole for corporations and gives localities limited new taxing authority to impose excise taxes on cigarettes.

I expect that Virginia will have a healthy debate over tax reform when the General Assembly convenes next January. As this debate gets underway, I believe that the opponents of our plan have an obligation to explain how they would fully fund public education and state government's other core commitments, while also preserving our AAA bond rating. My plan will achieve tax fairness for working families and meet existing obligations in public education and other important state services. It is the right plan for Virginia.

If you are interested in obtaining a copy of our plan, please feel free to visit my website at www.governor.virginia.gov or call us toll-free at 1-888-TAX-REFM.

Thanks for your attention to this important issue. I hope you and your family have a happy holiday season.

Sincerely,

Mark Warner

My Comment: the House will drag this out for the enjoyment of making the governor squirm, but this is DOA.

[Corin Stormhands]

I haven't read all of it. But he says the plan will raise the tax rate on filers with incomes over $100,000. He says that's "only 8 percent of filers." Does that sound right?

I'm wondering if he's talking individual filers as opposed to household incomes?

[Corin Stormhands]

My Comment: the House will drag this out for the enjoyment of making the governor squirm...

I think you're right. But I also think we gotta make him look as bad as possible.

[iceskater]

How can 65% of Virginians pay less tax and still close a $1.2B shortfall? This doesn't add up. Unless Warner has a magic money tree he isn't telling us about, this statement is false on its face.

[iceskater]

He does have a Clintonian streak to him. He could be parsing words.... Filers vs. household incomes.

Why do they keep villifying people who work hard, make money, create jobs and prepare for their own financial futures. Sheesh, that makes me crazy.

[Corin Stormhands]

He plans to close the "shortfall" by multiplying the current 2.5 cent cigarette tax by 10, taking it to 25 cents per pack.

Have all those high priced Philip Morris execs moved here yet? Wonder what they'll have to say?