The Virginia Senate has passed a bill that allows Northern Virginia counties to impose their own income taxes without a public referendum. The bill specifically allows a 1% income tax supposedly to be used to fund public transportation. This 1% income tax would be in addition to federal and state taxes that residents in those counties and cities already pay. But the counties don’t want this power, and the residents obviously don’t want to pay another tax. Current law already allows counties to impose income taxes, but only following a public referendum that shows that a majority are in favor of such a tax. The bill being proposed in the Virginia legislature bypasses that public vote.
One county board chairman pointed out that more taxes aren’t going to solve anything because they don’t have a revenue problem; they have a spending problem. Sound familiar? The Washington Post reported:
“Prince William [County’s Board Chairman] Stewart pointed out that Virginia’s budget rose from $23.5 billion in 2002 to $39 billion in 2011. “When your income goes up by 66 percent and you don’t have enough money to make ends meet,” Stewart said, ‘you don’t have a revenue problem, you’ve got a spending problem. They just haven’t made transportation a priority.’”
Government officials think that if they want to pay for their pet projects, all they have to do is raise revenue, and you do that by increasing taxes, especially on the rich. But it doesn’t work that way. There is a point where the “rich” won’t take the high taxes anymore, and they’ll move away. When the more wealthy people move out of a county or a state or even a country, the government loses revenue. It’s that simple.
Look at the small town of Dixmoor, Illinois. They’ve got a 9.5% sales tax, a 5% income tax, 10% unemployment, and nearly a quarter of the population makes less than $15,000 a year. They’ve driven the more wealthy people out of their town with higher taxes, and now the city is suffering a loss in tax revenue of $600,000. They have no money. The city can’t afford to pay its employees. It can’t even afford to fill up their police cars with gas. The police chief has had to pay to fill up 3 of the 5 squad cars with his own money. The Public Works Commissioner said that if there were a major snowstorm, they wouldn’t have the money or the gas to clear the roads.
Or look at the Hurricane Sandy victims. Some have had to pay upwards of $100,000 to fix their houses, but the city is increasing their taxes because they’re claiming the property values have gone up. Some of these houses are still in disrepair and haven’t been lived in since Sandy, but they’re being slapped with higher property taxes. And these are some of the more wealthy homeowners. And they’re outraged that the city is taking advantage of them. Are these taxes going to drive these homeowners away too, thereby decreasing the city’s property tax revenue?
If the government really wants to increase their revenue, they have to make the U.S. a place where millionaires and lower income workers alike want to be. People are being driven away by higher taxes. Give people more freedom with the fruits of their labor, and not only will tax revenues increase, but the government wouldn’t have to spend anymore money on their fake economic stimulus initiatives.