Virginia Governor Bob McDonnell's Transportation Tax Hike Takes Effect Today
Virginia taxpayers will take a hit to their wallets today as the state-wide sales tax will rise from 5-percent to 5.3-percent. Residents of Northern Virginia and Hampton Roads will see an even greater sales tax hike, from 5-percent to 6-percent. In addition, the state gas tax of 17.5-cents per gallon will be eliminated and replaced with a 3.5 –percent sales tax on wholesale gasoline and 6-percent on diesel.
While the new gas tax should lead to lower gas prices, many suspect that gas prices will in fact not go down, instead remaining at the current price or jumping up even higher heading into the summer travel months.
In total, House Bill 2313 amounts to a $5.9 billion tax increase on Virginians – including a provision to enact an internet sales tax pending congressional approval of the Market Place Fairness Act. The tax hike was pushed by Governor Bob McDonnell and Speaking Bill Howell, along with Democrat lawmakers in Richmond during this past 2013 legislative session.
“Governor Bob McDonnell should have known better. He walked down a dark alley with tax and spend Democrats and got mugged. His legacy as Governor is backing the largest tax hike in Virginia history,” said Grover Norquist, President of Americans for Tax Reform.
Norquist continued, “This is the third major tax increase that has been ushered through the Republican House of Delegates by Speaker Bill Howell. Today, Virginians will begin to feel the cost of failed leadership in Richmond.”
Maryland: Gasoline tax hike and toll increases take effect
Maryland residents are facing the consequences of tax and spend policies coming out of Annapolis today, as the state’s gasoline tax rises by nearly 4 cents, and tolls throughout the state are rising by as much as 50%. Furthermore, things will only get worse for motorists in the coming years, with the gasoline tax set to go up by 42 cents by 2016, amounting to a $3.4 billion dollar tax increase.
Such policies come as no surprise to hardworking taxpayers in the Old Line State. Today’s tax and fee increases mark the 54th time that Governor O’Malley has raided their wallets to the tune of $2.8 billion dollars to finance more government spending. These policies will have a disastrous effect on business and taxpayers, who will be forced to tighten their belts to cover the increased costs of their commutes.
“Maryland Governor Martin O’Malley has left a legacy of higher taxes and higher fees for Maryland residents. With the help of Democrat lawmakers in Annapolis, he has raised the tax burden on Maryland families by nearly $2,000 per household. Now he has his eyes on taking his liberal tax and spend policies that are choking Maryland to the White House,” said Grover Norquist, President of Americans for Tax Reform.
Norquist continued, “Maryland has become an example of how not to run a state. Just days before the July Fourth holiday, O’Malley and his liberal allies have made it more expensive to travel around the state. Under their poor governance, Maryland has continued down the path to economic ruin.”
Stand with Senator Lamping
The Establishment in Missouri is pushing an $8 billion tax hike. Use the web contact form below to show your support of Sen. Lamping's filibuster efforts.
ATR Urges Virginia Candidates to Support Repeal of Gov. McDonnell's Tax Hike
Today, Americans for Tax Reform issued an open letter to candidates for state office in the Commonwealth of Virginia asking them to support the repeal of Governor Bob McDonnell's $5.9 billion tax hike. With the state Republican Convention kicking off this weekend, it is important for delegates to know where their candidates stand on Gov. McDonnell's massive tax hike - the largest in Virginia history. Click here for a PDF copy of the letter.
May 16, 2013
Just a few days ago, Governor Bob McDonnell signed into law the largest tax increase in the history of the Commonwealth of Virginia. With a price tag of at least $5.9 billion, the tax hike will undeniably harm Virginia’s economy, meaning less money in taxpayers’ wallets and less jobs for Virginians seeking work. I urge all candidates for state-wide office and the House of Delegates to support the repeal of this onerous burden on taxpayers.
A coalition of spending interests and their political allies – including Governor Bob McDonnell, Speaker Bill Howell, Senate Majority Leader Tommy Norment, Senate Minority Leader Dick Saslaw, and Senator Frank Wagner – are working hard to fleece the taxpayers of Virginia. The repeal of HB 2313, Governor McDonnell’s tax hike, would send a message to Virginia voters and taxpayers that you are serious about protecting their interests, not the special interest spending lobby in Richmond.
With the tax hike now law, Virginians will see hikes in their diesel fuel taxes and the gas tax will rise with higher gas prices and inflation. Residents of Northern Virginia and Hampton Roads will see increases in the local sales tax from 5 to 6 percent and Northern Virginia will see additional increases in taxes on homes sales, and increased hotel taxes. The rest of the state will experience a sales tax hike from 5 to 5.3 percent. Eventually, every region of Virginia could be subject to a 6 percent sales hike.
In addition, the legislation puts into place a regime set to collect internet sales taxes if Congress passes the Marketplace Fairness Act – currently in the House of Representatives. If Congress is unable to pass an internet sales tax bill, Virginia residents will see fuel taxes raised even higher to make up for the promised tax collections. Even worse, the Marketplace Fairness Act would subject Virginia’s small businesses to over 9,000 taxing jurisdictions in all fifty states. Imagine a small business man from Virginia having to appear in a tax court in cash strapped California or Illinois.
In the end, Governor McDonnell’s tax hike is nothing more than a transfer of money from the taxpayers pocket to the spending interests in Richmond. The tax hike must be repealed.
This burdensome and economically destructive tax hike won’t relieve congestion on Virginia roads, it won’t pave Virginia’s roads, and it won’t fill the pot holes. It will line the pockets of the spending interests and lobbyists in Richmond. This tax hike must be repealed.
As a candidate for elected office in the Commonwealth of Virginia, I urge you to publically call for and work to repeal HB 2313, Governor McDonnell’s $5.9 billion tax increase.
Grover G. Norquist
Americans for Tax Reform
New Tobacco Tax Hike One of Many Shards of Glass in Obama Budget
Though the President will not officially release his 2014 budget plan until next Wednesday, details of the plan are already starting to materialize.
Leaked on the day Bureau of Labor Statistics revealed job creation in March was less than half of what economists had expected, the plan is expected to outline a bevy of crippling tax increases.
Notably, the President is proposing once again to fund expansions of federal programs through tax hikes on tobacco products.
The plan will propose an increase in the federal excise tax to fund an expansion in pre-k programs. Without details, it is impossible to know what kind of price tag this proposal carries. However, the progressive Center for American Progress has estimated such a program could cost $100 billion over ten years.
The Congressional Budget Office estimated last year that a 50 cent increase on cigarettes would net less than half that amount in new revenue. What's more, one only needs to look to the states to see that tobacco taxes are a declining revenue source. Washington, D.C. raised its cigarette tax by $.50 in 2009 only to see an 11 percent net decline in cigarette tax revenue. South Carolina added $.57 to each pack of cigarettes in July 2010. Despite the rate increase, records show a decline in cigarette tax revenue in South Carolina since that time. With tobacco tax revenue showing steady signs of permanent decline, tobacco taxes just act as placeholders for future tax increases.
It is important to note that these overwhelming costs would hit the populations least able to afford it. A tobacco tax falls squarely on the shoulder of lower-income Americans. With millions of Americans either unemployed or under employed, it is important to remember that this is a tax increase that will hit people making on average only $36,000 a year.
This is just one in what will be a litany of proposals to increase the size of government. We'll have the full rundown of the President's proposal when it is finally released.
ATR Applauds Virginia Pledge Signers
Americans for Tax Reform would like to applaud the 18 Taxpayer Protection Pledge signers in the Virginia House of Delegates who stood firm against a $6.1 billion tax increase. These lawmakers serve as an example of what legislative leadership looks like. When presented with a bill that was a massive tax increase, that was not posted online for the people of Virginia to see, these 18 lawmakers stood for what was right and said no to HB 2313.
The 18 Pledge signers who kept their Pledge are as follows:
Robert Bell (H-58)
Kathy Byron (H-22)
Ben Cline (H-24)
Mark Cole (H-88)
Barbara Comstock (H-34)
C. Todd Gilbert (H-15)
Greg Habeeb (H-8)
Tim Hugo (H-40)
Steve Landes (H-25)
Scott Lingamfelter (H-31)
Robert G. Marshall (H-13)
Israel O’Quinn (H-5)
Chris Peace (H-97)
David Ramadan (H-87)
R. Lee Ware, Jr. (H-65)
Michael J. Webert (H-18)
Tony Wilt (H-26)
Tommy Wright (H-61)
Americans for Tax Reform and taxpayers across the Commonwealth of Virginia thank you.
ATR Statement on Virginia Transportation Plan
Virginia Governor Bob McDonnell’s latest transportation funding proposal gets some things right: it begins to prioritize transportation spending while eliminating the gasoline tax.
But the truth is that most Democrats and too many Republicans in the legislature do not share Gov. McDonnell’s prioritization of Virginia’s transportation needs. Surprisingly, many of those opposed to making transportation a real priority hail from Northern Virginia and the Tidewater region, where transportation problems are most acute. The pressure imposed by these intransigent legislators has so far prevented a plan that addresses Virginia’s transportation funding problems in a fiscally sustainable manner and does not grow the overall tax burden.
The plan as it stands now fails in its goal to prioritize transportation spending while avoiding tax increases. In the coming days, taxpayers expect legislators to work to protect Virginia families. To achieve a transportation funding bill that rejects tax increases, Americans for Tax Reform recommends the following:
- Lower the size of the new additional sales tax component intended to replace the gas tax to one that avoids tax increases on Virginians;
- Include the termination of the diesel tax along with the state gas tax;
- Either eliminate the $15 car registration “fee” increase or accurately include its new revenues as taxes and reduce taxes elsewhere;
- Further prioritize state spending by allocating a greater share of General Fund revenues toward Virginia’s infrastructure needs, as the Governor has repeatedly proposed, notwithstanding the obstinate refusal to date of a handful of anti-taxpayer Republicans in the senate to support this sustainable approach.
At the same time, there is the danger that this plan could become an even worse deal for Virginia taxpayers as it moves through the legislative process. In the past, particularly in the senate, anti-taxpayer Republicans like Sen. Maj. Leader Tommy Norment, Sen. Frank Wagner, and Sen. John Watkins have worked with Democrats to hijack sound, tax-neutral, pro-growth transportation funding proposals to turn them into tax hikes to fund their pet projects.
By their actions, this tax-increase cohort has repeatedly told Virginians that transportation funding is their lowest priority. By funding everything else the government does first, leaving no room left for basic transportation needs, these members’ actions reveal what their rhetoric obscures. They will only meet this core function of government after every spending interest in Richmond is served.
Since Mark Warner’s dishonesty some three governors ago (running against tax hikes and misstating Virginia revenues to promote them), these members have conspired to scuttle any real reform in transportation funding, instead raising taxes that somehow never reach their stated target. Meanwhile, years later, the structural hurdles that facilitate the raiding of Virginia’s revenues for other purposes continues unabated. More tax increases simply cannot solve Virginia’s transportation problems—only statutory (or constitutional) reform that allows proper allocation of its resources can keep Virginia moving without sacrificing its engine of economic growth.
This session, Americans for Tax Reform hopes that Senators Norment, Wagner, and Watkins will this time work with their Republican colleagues in the house and senate to craft a sustainable, plan which addresses Virginia’s transportation needs and is not a Trojan Horse for higher taxes.
The fact is Virginia does not have a revenue problem; it has a problem prioritizing spending.
Tonight: Democrat National Convention to Showcase Tax Hiking Governors
On the opening day of their national convention, Democrats have chosen to showcase three governors who have a long history of pushing job-killing tax hikes on their respective states: Illinois Governor Pat Quinn, former Virginia Governor Tim Kaine, and Maryland Governor Martin O’Malley.
Illinois Governor Pat Quinn, who kicks off the evening of tax hikers, has had a long love affair with tax increases. In May of 2009, Gov. Quinn proposed a 50-percent income tax hike, increasing the income tax rate from 3-percent to 4.5-percent. The proposed tax hike would have taken about $4 billion from Illinois’s private economy near the peak of the state’s recession. Thankfully, the tax hike failed in the legislature.
In March of 2010, Gov. Quinn took another stab at hiking taxes, this time proposing a 33-percent, $3 billion tax hike. It also failed.
In July of 2010, the Illinois budget director David Vaught let slip a proposed “secret” 67-percent income tax hike being pushed by the Governor. Gov. Quinn scrambled to distance himself from the comment and denied the proposal.
Finally, in January of 2011, Gov. Quinn got his wish and signed into law a whopping 66-percent income tax hike, draining $6.8 billion out of the private economy. The tax hike tagged an extra $1,000 to the bill for a family of four earning $50,000 a year. Additionally, Gov. Quinn was able to hike the corporate income tax rate – driving more business and jobs from the state. This year, Gov. Quinn signed into law a 102-percent tax increase on cigarettes.
Gov. Quinn has repeatedly shown that he is more interested in hiking taxes on struggling Illinois families and businesses, rather than getting the state’s poor fiscal house in order. The state reportedly has the worst budget deficit in the nation, operating $43.8 billion in the red.
After Gov. Quinn comes the former Governor of Virginia and current U.S. Senate candidate, Tim Kaine. As governor, Kaine picked up where his predecessor Mark Warner left off, pushing for higher taxes. He attempted to raise the maximum state income tax rate from 5.75-percent to 6.75-percent. The proposed hike would have hit Virginians making as little as $17,000 a year. Over his whole term as governor, Tim Kaine proposed roughly $4 billion in new taxes – thankfully the state legislature did not see eye-to-eye with Kaine on the tax hikes.
Capping off the night of tax hiking governors is current Maryland Governor Martin O’Malley. Gov. O’Malley has become especially fond of tax increases as opposed to spending restraints. A 2011 study by the National Governors Association and the National Association of State Budget Officers showed Maryland to have the fastest growing state budget in the Mid-Atlantic and the seventh highest budget growth in the nation. In 2012 Maryland’s budget was the fourth fastest growing in the nation. To pay for Maryland’s spending explosion, Gov. O’Malley has proposed and signed into law a bevy of tax hikes.
Since 2007, Gov. O’Malley has raised taxes by $2.2 billion, driving 232,000 taxpayers from the state of Maryland and roughly $13 billion in income with them.
During the Special “Tax Hike” Session in 2007, Gov. O’Malley signed into law a $603.4 million sales tax hike, a doubling of the state cigarette tax from $1 per pack to $2, a $191.3 million income tax hike with the new rates set at 4.75-percent and 5.5-percent, and a corporate income tax hike from 7-percent to 8.25-percent.
When the 2007 tax hikes failed to generate the desired revenue, Gov. O’Malley signed into law a special “Millionaires Tax” during the 2008 general session. This tax hike pushed the top marginal income tax rate from 5.5-percent to 6.25-percent – a $154 million tax hike.
With the state still operating with a structural deficit of over $1 billion, Gov. O’Malley signed into law a slew of a new tax hikes during a 2012 special session. A “Millionaires Tax” 2.0 was passed and signed, increasing income taxes on individuals making over $100,000 and couples making over $150,000. Additionally a $5 million tax hike on smokeless tobacco and “Little Cigars” was signed into law as well as the elimination of some personal exemptions to the income tax.
It’s no wonder that a state burdened with ever increasing taxes and out-of-control spending was found to be one of the worst places to retire.
Keep in mind tonight that these Governors are considered rising political stars and leaders in the Democrat Party. To most Americans, their tax hikes, both enacted and proposed, would have dire financial consequences. They have unleashed fiscal havoc on their states, yet we are told to believe that they are reasonable leaders. While Gov. Quinn looks to have hit his political ceiling as Governor of Illinois, Gov. Kaine is looking to bring his tax and spend liberalism to the U.S. Senate and Maryland Gov. Martin O’Malley has his eyes on a 2016 presidential run, hoping to turn the rest of the United States into the over-taxed and broke State of Maryland.
Oklahoma's Intangible Property Tax Problem
Besides choosing their elected officials this November, Oklahoma voters will have to make an important decision on State Question 766, deciding whether or not intangible property will receive a tax exemption. A quick hint, if SQ 766 passes it could fuel further job growth and innovation in the state. If the ballot measure fails it could cost Oklahoma businesses precious resources in a stagnant economy and lead to new rounds of layoffs.
Until a 2009 State Supreme Court ruling, some Oklahoma businesses were “centrally assessed” by the State Board of Equalization while others were “locally assessed” by county assessors. Those that received local tax assessments were generally exempt from paying taxes on intangible property, while “centrally assessed” businesses had to pay taxes on intangible property. Now small and large businesses alike would be forced to pay property taxes on the value of their customer lists, contracts, philanthropy and goodwill, patents, and trademarks. They'd even pay property taxes on advertising.
AT&T sued the State of Oklahoma over taxes they paid on intangible property per their assessment from the State Board of Equalization. They lost the case when the Oklahoma Supreme Court ruled that “locally assessed” businesses were not exempt from the tax, effectively extending the tax on intangible property to all Oklahoma businesses. SQ 766, which stems from the Supreme Court ruling, seeks to remedy the new tax regime on intangible property – almost no other states tax intangible property.
The extension of a tax on intangible property to almost all Oklahoma businesses could cost employers hundreds of millions of dollars.
If SQ 766 passes, it would stave off a possible economic disaster for the state. With an uncertain tax regime and assessments on ideas and innovation, businesses would flee the state. Exempting taxes on intangible property is paramount to Oklahoma’s full economic recovery.