Statement on Transportation Plans in the Commonwealth of Virginia
In light of the anticipated transportation plans for the 2007 session, Americans for Tax Reform has been asked about the implications of various proposals for signers of the Taxpayer Protection Pledge. Although the compromise proposal put forth last week merits additional information and further evaluation, there are components that may be of concern for taxpayers.
Based on the limited information available to us at this time, the proposed state-wide tax and fee increases, specifically the diesel tax increase, appear to lack offsetting tax cuts in the legislation.
As signers are aware, the Pledge allows for revenue neutral reform. This allows for tax increases when offset by tax cuts of equal or greater value. In order for a tax cut to qualify as an offset, it must be in the same piece of legislation as the tax increase and must go into effect at the same time as the increase. Previous tax cuts and potential tax cuts in the future do not meet the definition of an offset.
ATR is also seeking clarification with regard to the apparent disparity between the current and the proposed revenue-raising abilities of local authorities. While the proposed compromise effectively repeals the authority to raise the local income tax, it also seems to omit two key taxpayer protections that existed under the income tax authority: the voter approval requirement and the mandated five year tax sunset. Without inclusion of a referendum vote and a sunset, taxpayers cannot be sure that
their overall tax burden will not rise under the guise of reform.
After a preliminary review of the information available, only with the addition of offsetting tax cuts to the legislation, legislators could vote for the compromise plan and be consistent with the Taxpayer Protection Pledge.
ATR continues to seek and welcomes addition information and clarification.
Tuesday, January 23, 2007
ATR's Statement On GOP Transportation Plan
This was forwarded to me by a friend: