Tax Increase? What Tax Increase?
By Jason Johnson | Saturday, January 8th, 2011 | Catch-All, PoliticsOn Monday evening Republican Greg Habeeb met his Democratic opponent, Ginger Mumpower, for their sole joint appearance of the abbreviated campaign to succeed Rep. Morgan Griffith in the Virginia House of Delegates: a candidate forum sponsored by the Salem PTA. While education was the primary topic of the PTA-sponsored forum, Ms. Mumpower’s record on taxes became the most hotly contested issue of the evening. It’s not uncommon for candidates to experience election-year “conversions” on unpopular issues, but Ms. Mumpower’s about-face on tax increases at Monday’s forum revealed a candidate so unprepared to serve that even the liberal editorial board of the Roanoke Times could not bring itself to endorse her.
As reported when first nominated by 8th House District Democrats, Ms. Mumpower, a prominent Roanoke Valley entrepreneur, is running on her business background and record of service on the Radford City Council. Mumpower claims that during her term on council, she was able to expand the city’s services without raising taxes. Citing this as an example of her fiscal conservatism, Ms. Mumpower continued to trumpet her low-tax message at Monday evening’s Salem PTA forum—until the truth of her record got in her way. “I think that with the economic times we’re in right now, there’s no way we could suffer a tax increase and I would not support that.” The problem for Ms. Mumpower is that, despite her campaign-year amnesia, she actually has.
According to city council minutes and newspaper articles compiled by the Habeeb campaign, during her single term on the Radford City Council between 1984 and 1988, Ms. Mumpower voted to increase and/or create four, separate taxes: a two-cent real estate tax increase, a two percent meals tax, a 3.8 percent electric tariff and the creation of a tax on local telephone service. Contrary to her campaign rhetoric of fiscal conservatism, when the City of Radford’s budget was unbalanced in the spring of 1986, then Vice-Mayor Ginger Mumpower made the motion to raise the city’s real estate tax by two cents per $100 of assessed value (MinutesRealEstateTax). The only fat trimmed from that budget was $5,000 of a request for $25,000—for the Radford Founder’s Day Committee. Also that year Ms. Mumpower voted to create a new two percent meals tax to be levied by all establishments selling food within the city limits (MealsTax). When the going gets tough, Ms. Mumpower has a history of raising taxes.
When, at the Salem PTA forum, Ms. Mumpower was called on her true record of raising existing taxes and creating new ones when needed to balance the city’s budget, she denied ever voting for tax increases—even in the face of Mr. Habeeb’s indisputable evidence to the contrary. “I know I did not vote for tax increases.” Ms. Mumpower’s election-year amnesia on her record as a serial tax-hiker simply demonstrates that Ward Armstrong’s Democrats selected a weak candidate who was ill-prepared for prime-time and unfit to succeed a conservative giant like Morgan Griffith.
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A lifelong political junkie, Jason caught the political bug as a fifth grader after meeting George Allen in 1993. Since then he has studied political science at both the undergraduate and graduate level. When not perusing the blogs or volunteering for conservative Republicans, Jason enjoys cheering on his beloved Virginia Tech Hokies and spending time at his Bedford County home.
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22 Responses to "Tax Increase? What Tax Increase?"
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Yes, today’s mantra of no tax increases is certainly the popular position, and is similar to the pattern adopted by the House of Delegates where most of them have signed the no tax pledge. As a result, the physical and fiscal damage to our transportation infrastructure now totals some $9,000,000,000, which could be construed as a transfer payment that must be made by our children. In another arena, while we don’t support education like we used to, these costs have simply been transferred to parents and students in the form of higher tuition, robbing any credence to the claim that our Commonwealth’s future will be bright due to our support of research and development. The cost of this brand of fiscal conservatism is just too much.
As usual, leftists have no problem with blatant flippant lying nor do their supporters. Since it is a political “necessity” leftist Dems Should lie about their tax record. They should also lie about health care because the rubes are too stupid to know what’s good for them. Remember Baghdad Ahmed, Saddam’s press chief? He stood there vehemently denying the US was advancing to Baghdad until someone whispered in his ear and he dashed out the door. Fifteen minutes later a US soldier appeared in the briefing room. That is the leftist model for “transparency”.
Mike: I don’t necessarily disagree that there are times when tax increases might be necessary to fund essential government services, but the problem is raising taxes has become a crutch for our legislators, particularly those in the Democratic Party. Instead of doing the hard work of being true stewards of the people’s money and taking a hard look at how they are spending our tax money, which programs are ineffective, etc., when the going gets tough they always take the easy way out by asking for higher taxes. (Remember the Warner tax increase–I mean, “reform”–that was supposed to fix our Commonwealth’s budget problems once and for all? How long was it before Gov. Kaine asked the General Assembly for another tax increase?) Let’s see Richmond and Washington wisely spend the money they already have before they ask us for more.
Valentinus: I believe Ms. Mumpower is just a hapless candidate. She’s a very nice lady but she’s in way over her head with this campaign.
Totally agree Jason. Just as a reminder & side note, before Kaine was even in office, the budget again went into SURPLUS the summer of Warner’s budget BEFORE Warner’s Tax increase even went into effect. (The economy was recoverying faster than they could implement the tax and take credit for a balanced budget. Ha! Ha! )
So buget surplus that summer, then Warner’s tax increase goes into effect, then came what ever Kaine did.
I will be more honest than the Democrats were with Gilmore/Warner. Kaine’s tenure also had to deal with a later world wide economic recession that he wasn’t responsible for either. Pretty sad people act like 9-11 or wars, recession affecting every state, are something a Governor can control. Instead, they play childish “gotcha!” games and hope nobody notices that they’re full of crap.
Well Jason and Britt, I am not buying your yes but response. Fact is, because of the intrasigence of the republicans in the House of Delegates, the theft of value from our public infrsatructure makes any petty crime in government look like a penny to the dollar. $9,000,000,000, that is the value of deferred maintenance to highways, bridges, tunnels in this Commonwealth, essentially created by the decade long control of the House by republicans who have signed the no tax pledge. The fact that moderate, business oriented republicans let them get away with it is deplorable. I guess that invitation to the Governor’s Mansion is just too important to risk acting in the public interest.
No, Mike. It is the hoarding of the “General Fund” and lack of overall leadership on BOTH sides through several past administrations/General Assemblies.
Either we have such a dire emergency or we don’t. If we do, prioritizing is in order and special interests will have to share their death grip temporarily on the General Fund until the “crisis” has been solved.
I’m tired of Hampton Roads contributing a large share of state revenue and not getting a return for road projects that are after all a good deal temporary not counting maintanence. To further the crime they somehow persuaded many local “leaders” that further diluting our share of road revenue was a good idea. Our reduced share would have been replaced by taxing ourselves to pay for what was already our money – the HRTA. You know, that unconstitutional regional taxing authortity!
The problem is fat cat special interests and budget hoarders. The rest of the Commonwealth be damned as far as they care. The problem is not that we don’t currently tax enough. Putting an additionally burden on the local economies would only slow down any growth, revenue collection, and recovery anyway.
Well Britt, it was “unconstitutional” because while the House, by passing HB 3202, agreed that we do have a crisis, and transportation needed additional funding, they lacked accountability and the courage of their convictions. That is, they cleaarly agreed we have a problem, but they would not vote to levy the taxes to correct the problem. Frankly, that is exactly why I think their lack of action is so despictable and reprehensible, and makes the petty crimes of people like Hamilton et al so piddling by comparison. Billions of dollars of damage to our transportation sytem, yet business leaders help get this cast of characters reelected so they will get invitations to the Governor’s mansion.
And they didn’t even dare to form an authority to decide how much of the General Fund would be temporarily reprioritized, because they fear the vested interests more than even the tax payers.
Raising taxes would solve many congestion problems as does expensive housing and costs of living. It will serve to drive people out of the region. I imagine paying for off base housing allowances and military pay diluted by a higher cost of living might induce the millitary to relocate as well.
So just force people to leave and there will be no traffic? Good strategy.
So Britt, it has come down to that. You think a gas tax equal in value to what it was in 1986 would drive people out of the area? Are you absolutely nuts? Because we have not increased the fuels tax to stay even on buying power, we face tolls so high they will indeed bring about the doomsday scenario. Frankly, NC has a tax about double ours, yet they pay very little more for a gallon of gas. The cowardize of the republicans in the House of Delegates is literally bizarre and will doom our Commonwealth if it is not changed. What is more bizarre is the business leaders who contribute to their campaigns, knowing the damage they have done to our economy.
Mike, you make two valid points. (I hope that doesn’t scare your critics
)
1) NC gas tax is higher but the actual price of gas is only marginally more expensive in dollars per gallon. So, where one might ask, “Where is that profit hiding in Virginia?” Why is the state cheated of that revenue if the price is barely more.
2) As you correctly state, inflation has over time, eroded the value & consumer cost of the tax. You are correct in stating as far as I know that the GA has not kept it revenue neutral.
Unfortunately however, you are still wrong and partly because you are ignoring several factors. No, I am not nuts. Yes, I say an increase would be a drag on the economy already in peril. Yes, it would serve to drive out businesses and people. And yes, short term, it does pretty much come down to that. If you want the money right now, find the savings elsewhere. Gore somebody’s sacred cow for it and tell them it is for our transportation “emergency”. Maybe you can re-visit a tax increase down the road.
Ok, why if I agree with those 2 points of yours, do I still say it would be damaging?
I will try my best to explain the economics:
1)price demand vs. Tax cost is already budgeted into the local economy. Think of it as someone spending up to their means after getting a big raise and still almost being broke due to an unforeseen expense. The profit to the seller is budgeted in and he lives according to local cost of operation and of living. As do the employees he must pay. As do the consumers. In other words, your call for fairness does not change the fact that the tax would be an increased cost to the local economy. At least short term there would be price shock. You don’t make much profit from gas and the cost will have to be passed, but the consumer might not be willing to pay and drive less.
2 )Further, because all of this pricing is budgeted in, and the poor health of the economy, there is little price elasticity. A while back when prices were last up at their highest, government was crying about lost revenue. Why? People reacted to price and their inabilty to keep up, and stopped driving nearly as much. Even in summer. Remember that? You also have many cars with better gas milage, also an issue in the value of this type of (tax) revenue stream. Also a problem for the poor without that ability to buy a newer car. So by increasing taxes in an economy with little price elasticity, you can actually lose revenue. Especially when factoring in less local consumption of local goods since people are driving adverse due to cost.
3) North Carolina has a a different price/tax relationship because their taxes have been higher over time, budgeted in for local cost of living and ability to pay. The finer points of making a living selling gas are a little different. You also have to consider what amount of gas tax is state and what amount is local. A balance there in pricing ability.That cheaper cost of living in much of NC is also factored in, as is their averge consumer salary, as is their very different method of revenue streams. Their gas tax rate is very different, as is their sales tax. (Higher) However cigarette taxes are much lower as are many other taxes ending up being cheaper. The structuring of enforced fees(taxes) is different. Their tax levels are balanced in a different way, yet your call for fairness ignores that balance and you end up comparing apples to oranges.
So, there will be damage. Maybe if there is a recovery and ability/willingness to pay increases, you might be able to slowly increase the gas tax and not shock the economy. At this point in time we can’t afford to hurt the economy short term.
Just my assessment which no doubt you will disagree with.
Britt, baloney; your ideology is showing.
jASON: “Val, I believe Ms. Mumpower is just a hapless candidate. She’s a very nice lady but she’s in way over her head with this campaign.”
@Jason I’m sure that she, as with many leftists, are nice people as long as you keep them away from political office or talking about politics. However once they get involved in either they act like totalitarian wannabes. BTW This wasn’t true of the old anti-communist liberal Dems.
Mike – and now your self-interest is showing. So is your true disregard for the economic well being of others. You want what you want, and you want it now.
Surely, between McDonnell’s borrowing (good idea or not) and guys like you going to the GA and asking for General Fund money to begin the finance of your projects, you can get things done.
Either we have a transportation “emergency” or we don’t. If we do, surely a temporary shifting of assets to transportation will be understood as reasonable. If not, we must not have an emergency and they can hold themselves responsible. If there is a true emergency, then the rest of the state will not want to kill one of the golden geese laying all that golden tax revenue. Surely for just a little while, they can see it in their cold dark hearts to allow Hampton Roads to get it’s fair share of state spending to be used for roaads. If not………..they must not believe in your suggested doomsday scenario. I suggest that you go convince them.
Actually Britt, yes, my self interest is showing as both a citizen, and as the CEO of a real estate investment company. In neither case does the degradation of our transportation system make any sense whatsoever. There is broad and substantial consensus that our system is in serious decay and must be fixed; the basic point of disagreement is how to pay for it. Your suggestion that an increase in the fuels tax will drive businesses away defies reality, especially in view of the fact that some 43 states have higher fuels taxes than we do, and the large majority are doing just fine.
Mike, so you are saying increased taxes will not cause gas prices to increase? Are you saying high gas prices in recent past (about the level we are reaching again) that driving and gas usage do not decrease? You’re saying tax revenue doesn’t also decrease with high prices?
“Fact is”, less travel equals less local consumption, equals less sales tax.
The gas tax is no longer the logical choice of taxation. You can’t depend on it. Scarcity will jack up the price. That will give incentive for better gas milage to water down tax revenue. The effect of limited supply coupled with a devalued dollar on a world commodity further raises the price. The high prices lead to less driving. Just ask former Gov. Tim Kaine.
And how about those electric vehicles that are coming? Other alternatives?
It is well known that you make almost no profit selling regular unleaded, but you think gas prices won’t go up much with all those taxes you want?
You want to compare states Mike? You want to talk about differences in funding? How about we talk about Pennsylvania which is rated 4th in the nation in overall funding for highways and roads. Ranked very high in spending per mile and per capita.
But guess what ? Pennsylvania has been rated as having the WORST roads by Overdrive magazine and 38th in transportion spending efficiency by the Reason foundation.
In taxing structures there is a real pricing ability. State and local taxes compete with eachother. They both compete with vendor profit and ability of the consumer to pay(based on local cost of living). If the state gets the lion’s share chances are the localities get their funding elsewhere and/or get reimbursed in effect with state dollars spent on various things(transportation, education, police, etc etc). If there are only lower paying jobs & wages, chances are price demand will also be lower. BALANCES you ignore.
Actually Britt, no, I don’t think prices will rise at the same level as taxes. One only need look to NC to know that is true. In many cases although their fuel tax is double ours, the prices at the pum, are often quite similar. The fuels tax is only one component that retailers must consider in setting prices. Frankly, you cannot be a businessman if you countenance the slow yet steady destruction of our transportation system. Frankly, it is hard to understand how any citizen could either given its importance to our prosperity.
Lol, ok Mike. I already answered why there is a difference between NC and Va. I even submitted that over time that the gas tax could be raised and variables in the economy rebalanced and budgeted in without undue price shock and harm to the local economy. Now is just not a good time to do it. Later, ok, but realize with reduced driving due to fuel costs, better gas mileage cars and future alternative fuels, and inflation, the gas tax is not the reliable revenue stream it once was. So, when taxes are raised on it later, don’t count on it as a permanent revenue stream. Help pay later for today’s borrowing by Gov. McDonnell? Maybe.
I also am not saying we shouldn’t improve transportation. I just say you don’t ignore your economic foundation while you pay for improvements. If we have an emergency then the General Fund should service that emergency.
I yield the last word to you, Mike. I’m done, but it was nice debating something other than the shooting. The floor is yours.
To the right wing, anti tax Delegates, it is never the time to raise taxes or fees. We have tough budgets, surplus budget, great times, bad times in the last decade, yet the Speaker of the House, Bill Howell, will acknowledge the crisis in funding for transportation, but he won’t take responsibility. Frankly, these Delegates should be ashamed at the condition of our roads, highways, and bridges, and this condition makes a mockery of the Governor’s economic development initiatives. One look at this year’s proposed budget, and the truth becomes patently obvious; the shift to fund transportation from the general fund, and to rob resources from public safety, education, human services, and courts and justice is accelerating. Starve the beast is the new slogan of the year. You must be pleased and proud.
Once again, on the ABC/budget issue the Governor starts the PR machine before we know the facts. Doesn’t he ever learn? His own party leaders remain skeptical, so what does he expect from the rest of us? Point is, this conversion simply does not make financial sense; no wonder the hype begins before the business case is released and discussed. The attempted link to transportation funding is disingenuous at best, plain deception at worst. A financial loss is a loss, no matter if money is made available to transportation.
I have to agree with Mike Barrett again…..uh oh.
How is this good if Virginia stays in the liquor business, even if just wholesale? So, if you start your own liquor store, you can only buy your product from the Commonwealth of Virginia? Nobody else? Whew! Sign me up!!!— NOT!!!
Not to mention it does NOTHING to solve the moral dilemma of Virginia being a booze dealer. Whether you find “demon alcohol” to be immoral of its own right, or you find it abominable that Virginia is in ANY business at all, you have plenty of reason to object to Virginia still being in the booze business retail or wholesale!!
I also have to agree with Mike that the way Gov. McDonnell went about it leaves much to be disired. If he was more open about it and we got all the facts…..maybe if he openly cooperated with fiscal libertarians that study this stuff, a more efficient way of pulling this off could be had.
There are examples of success from privatizing. Iowa, West Virginia, and Alberta Canada all have had success with privatization. See the following youtube:
Hello, MY SPOUSE AND I believe everyone, in the event you found yourself in Romania you do have a cider by me personally: ) Regards!
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