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Can Virginia House Dems Use their Window of Opportunity for Leverage?

by: A Siegel

Thu Feb 21, 2013 at 12:13:43 PM EST

(I'd also consider using whatever leverage we have vis-a-vis this transportation bill to push for Medicaid expansion. - promoted by lowkell)

The Virginia legislature seems poised to adopt a mediocre transportation bill - better than what Governor McDonnell proposed originally, but still pretty bad -- but the voting is likely to be close, as Tea Party Republicans are prepared to vote NO on the Governor's top priority because it includes tax revenues to pay for common goods.

This legislation represents one of the rare occasions where House of Delegates Democrats might actually have serious leverage. In looking at this bill, here are three major problems that House Democrats can use their leverage to address:

  1. Wholesale gas tax is lower than general sales tax rate.
  2. Hybrid tax is punitive and the (il)logic doesn't stand up to scrutiny.
  3. There are horrid transportation boondoggles embedded in this that will syphon off $billions (potentially $10s of billions) of limited resources that could be better spent on other transportation projects to improve Virginians' lives, improve Virginia's economy, and better serve Virginia's future.
Addressing these very quickly:
A Siegel :: Can Virginia House Dems Use their Window of Opportunity for Leverage?
Make Wholesale Gas Tax Equal to Sales Tax: While there a myriad of policy reasons why lowering gas taxes are simply bad policy (moving away from user fees, rewarding pollution, hurting efforts to reduce oil imports, promoting things that move money out of Virginia (since VA imports all of its oil products), etc ...), there is a fundamentally bizarre element at play here:  Why is the legislature going to reduce partially the gas tax percentage while increasing the general sales tax? A simple question, "Why should fuel for cars be taxed less than buying clothing for children?"
Democrats in the House should demand that the wholesale gas tax equal the general sales tax rate.

Eliminate Hybrid Surcharge:  Again while it is stupid on policy reasons (attacking those seeking modern technology and energy efficiency with lower pollution with lower external costs (such as reduced health implications)), the logic behind the hybrid surcharge doesn't stand up. Governor McDonnell has claimed it is required due to lost gas taxes. However, with the new wholesale gas tax, it would take over 20 years of average driving in a hybrid to lead to lost tax revenue of $100.  And, hybrid vehicles sell for higher prices than non-hybrids -- thus there is more tax revenue on sales and title transfers.  This is a punitive 'anti-green' tax which is simply a punching of those 'greenies' who buy hybrids and who generally favor Democratic Party candidates.

Democrats in the House should say no to this idiot policy which is targeting their own supporters.

Mandate open review of major transportation projects with legislative review before proceeding.  While the Coalfields Expressway is truly the worst (designed more to support Mountain Top Removal using tax dollars than to help better Virginia transportation), there are multiple $multi-billion questionable projects that will -- $ for $ -- do far less than Virginia and Virginians than a wide range of other transportation project options.

House of Delegates Democrats should demand provisions for external review of major projects and legislative approval requirements to reduce the waste of taxpayer resources on 'Roads to Nowhere'.
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Window of Opportunity ... (4.00 / 1)
And if the House Democrats cannot figure out a way to use this window of opportunity for leverage like you outlined, we should seriously question if they have any use or value at all.  

Not accurate on tax rates (0.00 / 0)
The currently proposed gas tax of 3.5% at the wholesale level is actually higher than the 2.5% sales tax rate levied on food sales in VIrginia.  

The old gas tax of 17.5 cents/gallon actually was something like a 0.05% sales tax, so this is a pretty significant improvement on that, though at a different point in the supply process.

Okay ... (0.00 / 0)
1.  You are right on the food tax.  Will change / correct the focus there.  Sigh ... don't keep up w/this.

2.  At 3.5%, how is a wholesale tax higher than the previous tax.  You even have, the 17.5 cent/gallon tax is not 0.05% but roughly 5 percent at current prices.  (at $3.50 wholesale, 17.5 cents is 5 percent as each % is 3.5 cents).  It is absolutely not a "pretty significant improvement" to cut the tax to 3.5% at an earlier stage where, in fact, the effective tax rate will be even lower.  

[ Parent ]
Changed ... (0.00 / 0)
to comparison to general sales tax.

[ Parent ]
And ... (0.00 / 0)
Reminder that general sales tax is on the retail, not wholesale, price. So, my approach still advantages gasoline but not nearly as badly as what is currently in the legislation.

[ Parent ]
A growing number of Dems... (4.00 / 2)
...are expressing major concerns, including Scott Surovell, Chap  and Patrick Hope.

Can Dems find the cojones to stand up to at least the worst parts of this awful legislation?

For a Sustainable Virginia. Now on Twitter.

Then there's the pointless complexity of these proposals (4.00 / 2)
Creigh Deeds also makes the point that this tax regime is stupifyingly complicated. Simplicity and transparency in taxation are always preferable sd they make it easier to track where funds are coming from and hence where they should go. This bill is convoluted and irrational in so many ways!

Typical GOP stunt (0.00 / 0)
The GOP always makes revenue legislation complicated so that funds can more easily be subverted.

[ Parent ]
Or (0.00 / 0)
in this case, its so they can claim they didn't raise taxes when they did.  

[ Parent ]


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