April 20, 2006

Virginia's Governor is Missing the Point

Just this week, Virginia's newly elected Governor Tim Kaine made a media splash with this press release.

The Governor seems quite proud of the Tax Foundation's findings that Virginia is indeed a low tax state. There are lots of reasons to question the methodology behind this much-publicized report that identifies "Tax Freedom" day for taxpayers. For more on that click here for a stellar report from the Center on Budget and Policy Priorities. But I can't resist sharing this from the report's methodology:

"Local taxes are excluded, such as property taxes and local sales taxes."
Apparently, not all taxes are even included in this calculation.

But for purposes of this blog post we'll assume that the methodology behind the Tax Foundation's claim is accurate and that Virginia does indeed have one of the lowest tax burdens in the country.

If the conservative rhetoric around taxes is accurate then we would see a flood of new businesses locating in Virginia. I'll leave it to our readers in Virginia to comment if such a migration is really happening.

But the real point is that while the Governor celebrates, he's missing the point. Even after taking into consideration the low income tax relief that was included in the 2004 tax reform package, low income Virginians still pay a higher share of their income in state and local taxes than do the wealthy. This means that if we accept that Virginia has a low tax burden overall - the accurate reality is that poor Virginians have a higher tax burden than do rich Virginians.

Perhaps Governor Kaine should stop celebrating and worry himself more with whether or not poor Virginians are being penalized by the current tax structure.


At 9:03 AM, Anonymous Chris D. said...

Yes! I've always been disturbed by how many Democrats refuse to take a serious look at the nature of our tax system. The regressivity and convolutedness of the system (which would be the pride of any Medieval overlord) undermines support for the very programs it funds and that these same Democrats have to spend so much time defending.

At 12:28 PM, Blogger mnwayne said...

The Tax Foundation annual state-by-state comparison does include local taxes. The Tax Foundation words regarding not including local taxes referred to one to the Census Bureau reports that does not include local taxes.


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