Has the GOP become the Tax-The-Poor Party?

In the late 1850s, a Northern performer began playing what he thought was a humorous and biting tune about the South. In less than a decade, to his shock and horror, Dixie became the unofficial anthem (and label) of the South itself. I’m wondering if Rush Limbaugh feels the same way about his 1991 April Fool’s Day rant in favor of taxing the poor…because the Republican Party appears to have made Tax-The-Poor its one consistent economic policy – to its and the nation’s peril.

Contrary to what it might seem, this realization did not hit me with John Cosgrove’s victory last night (although perhaps the inspiration to post did). Cosgrove defeated Stearns (my preferred candidate) for many reasons, some of which Brian Kirwin describes in detail here. That said, the nature of that race – namely that Stearns himself needed to run to ensure an anti-tax-hike candidate was even an available choice – is yet another symptom of the larger disease that is damaging the party: to wit, a desire to avoid reducing the size and scope of government by making poor Americans and Virginians cover its cost.

Moreover, this should not be seen as an indictment of one wing of the party, or a salvo in intra-Republican arguments. The entire party – economic and social conservatives, moderates and “RINOs”, and anyone else I may have missed – are culpable in this, including yours truly.

Admittedly, those who have supported the various GOP-backed tax increases in Virginia seem to be the worst offenders – emphasis on “seem”, because even those of us who are not in that group have shown a refusal to acknowledge the problem, let alone address it.

Think back to last year, when all of the arguments regarding the expiring tax cuts focused on the income tax rates. Obama wanted higher ones; the Republicans didn’t. Everyone quickly assumed their usual positions (such as they were) on taxes.

Yet when Obama asked to extend the payroll tax reduction and Republicans demanded he drop it, hardly anyone in the GOP uttered a word in protest: not the economic conservatives, not the social conservatives, not the moderates, not the “RINOs”, not the squishes.

Why were we all so comfortable letting a tax cut for the poor expire?

Closing in on Virginia, just about every tax increase proposed by Republicans or enacted with Republican support involved taxing the poor, and not lightly (even the 2004 income tax hike in Virginia, whose highest rate begins at $17,000 a year, hit poor Virginians, and the higher sales tax that year certainly did). How have tax-hiking Republicans tried to fund their transportation “fixes” in the past? Higher gas taxes or higher sales taxes. How did they “fix” it this year? Higher and broader sales taxes. Who feels the effect of these regressive taxes the most? The poor.

As for those of us on the opposing side of these tax increases, how have we made our arguments? To be fair, I can’t speak for all, but I can speak for myself, and I have focused largely on the dynamic portions of the economy, and how they are slammed. I have focused on how the regional tax increases were tax-the-rich in disguised. I ripped the lack of budget discipline. I talked about misguided road priorities and dysfunctional systems.

And my posts railing about the effect of the tax hikes on the poor? Don’t bother looking, even I know they’re not there.

We are rapidly approaching a new and dangerous consensus on the size and growth of government: i.e., big is back. The only arguments we seem to be having is whether the rich should foot the bill (as the Democrats contend) or the poor should (as Republicans increasingly contend). However, turning the Republicans into the tax-the-poor party has horrific consequences.

Firstly, as I’ve hinted above, it politically institutionalizes big government. The distance between America and Europe can really be described in one policy: the Value Added Tax. Without it, the half-social-democracy-half-corporatist-democracy we have built is unsustainable within a decade. With it, the thing can wheeze forward for a generation or more – long enough for our children and grandchildren to assume that this era was the economic equivalent of the Wild West.

Moreover, it marginalizes poor Americans politically. Was there any discussion of the poor in the 2012 presidential campaign? Has there been any in the current races this year? Are we really that convinced, as Republicans, that we have nothing to offer the poor but higher tax bills? The poor have to deal with big government as much as we do – in many cases, more so. They know as well as anyone how inefficient, demoralizing, and draining of human capital it really is.

Finally, it puts us at immediate electoral disadvantage. If the Democrats talk about higher taxes for the richest 5%, while Republicans talk about taxes for the poorest 25%, we’re 20 points behind from the get-go. Not smart.

The Republican Party has much to digest from the last year, and we need to ask, as a party, what we wish to be. There can be several answers, good and bad. I humbly submit a tax-the-poor platform is just about the worst of the lot.

Cross-posted to Bearing Drift

Corey Stewart flies his campaign into a mountain

Five years ago, when Bill Bolling announced he was running for re-election instead of taking a shot at the Governor’s chair, every candidate for LG backed out with 24 hours, except one: Corey Stewart. For a brief moment, Corey could have taken the anti-tax-hike, anti-3202 mantle and spoke for the angry Republican activists who were even then bringing Bob Marshall to within a whisker of the Senate nomination and about to sweep Jeff Frederick into the RPV Chair. Instead, Corey decided to wait, and became the last LG candidate for 2009 to back out.

Now, five years later, just as Barkley plummeted from a sure-fire first round pick in 2012 to a fourth-rounder in 2013, Corey Stewart is finding that his decision to wait to run for LG set off a chain of decisions that could ruin his career.

Last night, Jim Riley presented the case that Stewart was behind a slew of semi-anonymous criticisms of Scott Lingamfelter’s record, and completely anonymous smacks on Pete Snyder’s private life. As Greg L of BVBL notes, the latter is not just bizarre, but also illegal. To top it all off, yet another anonymous source magically appeared to try dumping it all on Susan Stimpson (Shaun Kenney, who saw through that like it was Saran Wrap). It’s getting so bad that Mike over at Write Side has decided to skip Richmond’s convention entirely.

Still, even as one tries to avert the eyes from a campaign flying itself into a mountain, there is a black box to recover, and things to analyze in the wreckage. What I find interesting is the different nature of the missives. The stuff used against Lingamfelter was fairly accurate – based on actual votes and donation records – and had an “organization” behind it. In other words, the i’s were dotted and t’s crossed.

The hits on Snyder, by contrast, were sloppy and amateurish (Jim has the details), besides being illegal. This reeks of desperation (as does the bizarre hit on Susan), and a sign that a campaign knows it is in deep, deep trouble.

So what can we take away from all of this? A few things, I think.

1. Stewart: the new mountain man
2. Snyder: Clearly on the up, or this wouldn’t have happened to him
3. Stimpson: Also on the up, or this wouldn’t have happened to her
4. Lingamfelter: although what hit him was accurate, victimhood by association will likely give him a boost
5. JMDD: may be a surprise benefactor of the Stewart crash. Locally, Stewart had some establishment cred, some of those who backed him because of it may go to her
6. Jackson: No impact, although he can likely use it as part of his fresh-face, outsider campaign
7. Martin: Um……

That’s how I see it, FWIW. Convention day is two weeks from Saturday.

Chris Stearns for State Senate

The May 7 “firehouse primary” for the 14th State Senate District is a tough one for me. I have friends who are backing Delegate John Cosgrove, friends I like and trust.

However, Cosgrove voted – every chance he got – for the massive tax hike known as Plan ’13 From Outer Space. Stearns, by contrast, opposed it steadfastly.

That makes Stearns the superior choice, and gives him the place in the hallowed right-hand column.

House passes amended Plan ’13 From Outer Space (UPDATED: Senate does too)

The House of Delegates approved McDonnell’s changes to HB 2313 (a.k.a. Plan ’13 From Outer Space), by a 64-35 vote. The roll is not up yet, but taxes will go up, including automatically for regions in the future that hit certain population and traffic levels.

I am deeply disappointed. This bill (and I assume the State Senate will grease the skids for this debacle UPDATE: which the State Senate has also passed with the Governor’s changes) will damage the state’s economy, political transparency, and accountability…while doing nothing about its over-centralized and dysfunctional transportation system.

It’s a sad day for Virginia.

New additions to the hallowed right-hand column

It’s springtime in Virginia, which usually means nomination battles…and we have plenty this year, meaning the list of endorsees (a.k.a., “the hallowed right-hand column”) is getting crowded.

The LG and AG endorsements are not actually new; it just took a while for me to get the web badge up (note to Mr. Obenshain, you need a web badge). The delegate candidates below Obenshain (Berg, Curtis, and LaRock) are all challenging Republican incumbents who all swooned over the McDonnell tax-hike fiasco (a.k.a. Plan ’13 From Outer Space). Finally, Patrick Mara is the Republican candidate for D.C.’s At-Large City Council seat (the special election is next month).

Please note that there is always room for more endorsees….

McDonnell’s amendments to transportation tax: a few rate tweaks, and a mechanism for AUTOMATIC future tax increases

Most of Governor McDonnell’s changes to HB2313 were minor – small reductions in the tax and fee rates – except for one big change that made this fiasco of a bill even worse: a mechanism to impose automatic future tax increases on Virginians.

One of the controversies surrounding what I call Plan ’13 From Outer Space was the state-imposed taxes on Northern Virginia and Hampton Roads (regional taxes being unconstitutional and all). So, in reaction to Attorney General Ken Cuccinelli’s reminder of that fact (VV), the Governor came up with this (also VV):

Addressing potential legal questions regarding regional taxation authority for Northern Virginia and Hampton Roads. Amendments are made to the sections imposing the regional taxes for transportation by the state to improve the legal posture of the law by changing the applicability of the taxes to any Planning District Commission meeting certain empirical thresholds including population, registered vehicles and transit ridership.  Hampton Roads and Northern Virginia are the only jurisdictions currently meeting these criteria, but in the future other parts of the Commonwealth could utilize these tools if their transportation challenges continue to grow.

Now, it sounds like the affected future regions could choose to impose new taxes, doesn’t it? There’s only one problem: there is no choice involved at all. From the verbiage of the amendment itself (LIS VA, italics in original, bold added):

In addition to the sales tax imposed pursuant to § 58.1-603, there is hereby levied and imposed in each county and city located in a Planning District established pursuant to Chapter 42 (§ 15.2-4200 et seq.) of Title 15.2 that (i) as of January 1, 2013, has a population of 1.5 million or more as shown by the most recent United States Census, has not less than 1.2 million motor vehicles registered therein, and has a total transit ridership of not less than 15 million riders per year across all transit systems within the Planning District or (ii) as shown by the most recent United States Census meets the population criteria set forth in clause (i) and also meets the vehicle registration and ridership criteria set forth in clause (i), a retail sales tax at the rate of 0.70 percent. In any case in which the tax is imposed pursuant to clause (ii) such tax shall be effective beginning on the July 1 immediately following the calendar year in which all of the criteria have been met.

No “could utilize” about it. The tax increase is automatic. The determination is made not by local or state elected officials, but by the U.S. Census. Thus, future taxes can be imposed on an entire region without anyone taking responsibility.

By the way, here are the list of Planning Districts in Virginia. Please note that, in effect, a subdivision built multiple counties away from you can trigger a tax increase that no one can stop under the Governor’s amendments.

If anything, this just makes Plan ’13 From Outer Space worse. It certainly is no way to govern…

…and it leaves Virginia’s transportation system just as overcentralized, disconnected from land use, and held hostage to upstream unfunded mandates as it was before this entire sorry episode began.

With any luck, the legislature will reject this; the entire, listing enterprise will sink beneath the waves; and Virginia can try again with a fresh perspective in 2014.

Susan Stimpson for Lieutenant Governor

There has been quite a bit of bandwith burned on the race for Lieutenant Governor in Virginia. Seven candidates have brought themselves forward. Looking at their records (or lack thereof in some cases), I have chosen Susan Stimpson.

Many of my friends have chosen differently, which does not surprise me (unanimity is rare in the rightosphere). Nor does it surprise me that the criticism other bloggers have aimed at Susan have avoided her record. After all, she is the only elected official running for a statewide Republican nomination who has never voted for a tax increase.

I would humbly submit that this is a more important gauge for a candidate than one’s proximity to Bill Howell in a photo or prior career. Lest anyone forget, when Susan had to choose between her relationship with Howell and her opposition to tax increases, she chose the latter, and emphatically – something that not every statewide candidate (*cough* Ken Cuccinelli *cough*) was willing to do.

In short, her record in office has revealed someone determined to reduce both government spending and the tax burden on her constituents. Forgive the repetition, but it bears repeating; Susan Stimpson is the only elected official running for a statewide Republican nomination who has never voted for a tax increase.

I remember bumping into Susan a few times in 2009. She struck me as a nice woman, earnest, dedicated, and likely to follow the mold of the Stafford Republican clique. I had no idea she would be asking my advice on the Stafford budget, let alone follow it to the letter (I told her if she thought spending could be cut and taxes reduced further than was being presented, she should push for it – which is exactly what she did). I certainly didn’t expect she would use her seat on the VRE board to demand an audit of the organization. As one who remembers how MSM used to portray Republicans who drifted leftward as having “grown in office,” i can happily say Susan has “shrunk” in hers.

For these reasons, I support Susan for the LG nomination. Any Republican running would be superior to the Democrats’ crop of candidates, but Susan is the best on the Republican side.

Virginia, education spending, and budgets

During the great transportation-tax-love-in last month, a slew of Republican delegates and senators lamented that there was “nowhere to cut” in the Virginia budget. I can still hear Dave Albo running through the list of uncuttables.

One item he simply glossed over was “education” – as if it were impossible to find any efficiencies there. Now, I understand that education is the holiest of holies when it comes to state funding (and local funding, too; even I avoided it when I was proposing alternatives to property tax increases in Spotsylvania), but a new dataset compiled by AEI’s Mark Perry inspired a rethink.

Perry was comparing teachers to non-teacher-staff numbers for the fifty states, and what he found for Virginia was astonishing:

Virginia public schools led the nation in “educrat bloat,” with 130,100 non-teaching staff compared to only 70,947 teachers. That means that there were 183.4 public school administrators and non-teaching staff for every 100 teachers, or a ratio of almost two administrators and non-teaching personnel for every one teacher!

Yowza!

Of course, Virginia (like most states) reroutes quite a bit of taxpayer money to localities for education: over $6.6 billion a year (VA Department of Planning and Budget). Had the Commonwealth followed the national ratio on staffer-to-teacher (roughly 1:1), it could have saved quite a bit of money.

How much? Well, in order to figure that out, first you need to know how much Richmond spends per staffer. Since the data Perry compiled was from 2010, I went with the 2010 General Fund – Direct Aid to Localities for Education figure ($4.77B)…

Funding	$        4,769,832,540
Teachers	70,947
Non-Teachers	130,100
Total Staffers	201,047
“Wrap Rate”	$                 23,724.96

For the uninitiated, “wrap rate” refers to all of the expenses tied to a person (wages, benefits, desk space, equipment, etc.). I mention this in order to explain why I didn’t decide to attempt to tease out capital costs spent by the recipients of the aid; for the most part, buildings and offices needed are driven by the number people on staff. Of course, the rate clearly shows that the state is not the only level of government paying for these people, which becomes important later.

So, what would the state have spent in 2010 if the ratio were 1:1, rather than 1.83:1? Something like this…

Total Staff 1:1	141,894
Cost, 1:1	$        3,366,429,832
Savings	$        1,403,402,708
Savings %	29%

So the Commonwealth would have spent over $1.4B less on local school budgets had the non-teacher overage been addressed.

Assuming the ratios still hold today, that would translate to $1.569B in annual savings – over 20% more than the annual tax increase that was supposedly needed for roads.

Now, one could argue (and even if one didn’t, I already assumed one did) that simply cutting the state aid to local schools by $1.569B and asking the localities to cut back on non-teachers would go over like a lead balloon in courthouses and city council buildings. However, this is where the low “wrap rate” becomes relevant. Clearly, the state isn’t covering all of these staffers’ expenses; localities are partially on the hook, too. So local taxpayers would still save money if their school system pared down its non-teacher staffers.

Still, I figured I should at least bend the ear of my friend Shaun Kenney (currently in his fourth year on the Fluvanna County Board of Supervisors). This is what he had to say…

Solution: whack the mandates that force localities to hire these bureaucrats.

The vast majority of this is coming down from Richmond.  Many localities would LOVE to do away with state mandated positions and the like… we just can’t.  The state comes in, forces us to hire, then retracts the state contribution because they are of the strong opinion that localities are awash in cash.

…

Almost half of the state mandates in Virginia directly impact education, and in many instances we have no idea what the cost or actual benefit (or negative impact) really is.

It’s ridiculous.  And no one has the guts to kill the mandates and treat localities as adults.

If that’s the opinion most localities share, this could be much easier than I thought.

More to the point, when it comes to finding alternatives to the Rube Goldberg tax-hike scheme now on the Governor’s desk (or, as I like to call it, Plan ’13 From Outer Space), please note what I have found (or projected to find) just after looking at one item – and one of the most politically sacrosanct items at that. Imagine what could be found if anyone went through the other $70-odd billion that is in the Commonwealth’s annual budget!

UPDATED: To be fair to Virginia, their hardly alone in this problem

David LaRock for Delegate

Lovettsville Lady gives details of the fun at the Loudoun County Republican Committee meeting last night. Among the Republican tax-hikers trying to explain their mistake was Joe May. He earned himself a primary challenger as a result.

Said challenger, David LaRock, now has a place in the hallowed right-hand column.

A draft transportation alternative to Plan ’13 From Outer Space

So Virginia’s tax-hike cheerleaders want those of us who opposed this fiasco to present a transportation alternative. Ok. Here goes…

1) Privatize all subdivision roads with existing HOAs. Inform subdivision without existing HOAs that their roads will be privatized in one year and they have that long to create an HOA or maintenance covenant among the homeowners.

2) All secondary roads are downloaded to local governments, along with the requisite percentage of as tax revenue needed to maintain them.

3) Repeal the sales tax increases (including the internet tax) and local tax increases

4) With localities in control if their own roads, the Commonwealth Transportation Board can be abolished

5) If 1-4 results in a revenue shortfall, raise the gas tax as needed, matched with a dollar-for-dollar reduction in the state income tax

6) Localities may create regional compacts for transportation maintenance or construction, but not have the state impose them from above. Members of the NVTA and HRTF have two years to affirm their willingness to remain members or they will be removed (re-opt in, rather than opt-out).

7) The Medicaid expansion used to win the Dems over on the tax hike is repealed.

The result? A transportation network that is more flexible, more accountable and closer to the people, with a pro-growth economic policy to boot.

Is this perfect? Probably not, as I just came up with it while picking up breakfast. Can it be improved? Probably.

Is it better than Plan ’13 From Outer Space? Absolutely.