Look no further than Creigh Deeds, the Democratic candidate for governor, right here in Virginia, for an explanation of why no one believes a politician who says he won’t raise taxes:
Deeds couldn’t give a straight answer to a simple question because he knows in his heart he will raise taxes. He just can’t say it because people won’t vote for him if he does — especially not in this year of protest against big government.
[Cross-posted at The Enlightened Redneck]
The Americans for Tax Reform Foundation has created an enlightening chart that estimates how much more money Americans must pay for certain goods and services because of taxes. Some of the taxes — the kind I have tracked here — appear on consumers’ bills, but many others are hidden.
Here’s the rundown from ATR:
I don’t drink or smoke, so I’m not personally affected by the “sin taxes.” And while I own a couple of hunting guns, I haven’t bought a new one in almost 20 years, so firearms taxes aren’t likely to rob me of more cash. But I have been hit by every one of the other taxes on the list more than once this year.
I keep a copy of ATR’s chart in my office at work as a stark reminder of how intrusive the government is in my life and my wallet. You should print a copy, too, at fiscalaccountability.org.
My friend and former National Journal colleague Troy Schneider thinks there is a “smart way” to raise gas taxes — a “green tax swap” that offsets the higher tax on gases with a corresponding cut in the payroll tax.
I have three problems with that idea:
1) Gas taxes already are too high. Gasoline currently is selling for the bargain price of $1.97 a gallon in the section of suburban Virginia where my family lives, and the gas tax for our state is now 44.6 cents a gallon, according to the latest data from the American Petroleum Institute. That means 22.6 percent of every gallon we buy goes toward federal, state and local taxes. The percentage that went toward taxes was lower when prices were higher, but 45 cents a gallon is more than enough taxation.
2) Raising gas taxes won’t necessarily lower consumption. Troy argues that it will based on the fact that consumption has declined dramatically in recent months because of higher prices, and he is right to an extent. But think about how high prices had to go before consumers and businesses changed their behavior. I’m confident that a majority of politicians won’t support, and American voters won’t tolerate, a $2-a-gallon hike in the gas tax, and it took that much before the market forced gas prices down.
3) Payroll taxes won’t stay lower. Even if politicians were to make the swap of payroll taxes for a supposedly green-friendly gas tax, it wouldn’t last. The same politicians eventually will increase the payroll tax. As this blog proves, raising taxes is what they do. The inevitable result of a higher gas tax would be less money in the wallets of consumers, not a better environment.
4) Barack Obama promised tax CUTS. It has only been a week since America elected as president a man who ran as a tax-cutting Reaganite. Odds are good that Obama, like the last Democratic president who promised tax cuts but quickly gave us one of the largest increases in history, sold voters a bill of goods. But give the man a chance to keep his word. Don’t start pushing taxing ideas that will fall heavily on the lower and middle classes two-plus months before he even takes office.
The bottom line: There is no smart way to raise taxes.
Jealous liberal journalists who long to be richer than Rush Limbaugh have been falling all over themselves to criticize their conservative nemesis and the undisputed champion of talk radio the past couple of days.
Why? Because he just negotiated a contract renewal with Premiere Radio Networks, a subsidiary of Clear Channel Radio, that reportedly will net him $400 million over eight years, including a nine-figure signing bonus.
Why that’s a problem is beyond me. If Premiere didn’t think Limbaugh was worth it based on past performance, the company wouldn’t have made the deal. It’s the free market at work, and every liberal who is whining about the deal would take all that money and then some if offered it for doing their jobs.
Besides, every liberal should be celebrating the rush of taxes that will flow into government coffers thanks to Limbaugh.
The numbers are staggering any way you look at it. I asked Peter Sepp, vice president for policy and communications at the National Taxpayers Union, to guesstimate Limbaugh’s tax bite from his new contract. With the obvious caveat that “there are a whole lot of variables both in the structure of his compensation package and the strategies he employs that would affect the actual tax burden,” Sepp predicted that Limbaugh will pay anywhere from one-third to 40 percent of his compensation to the government in taxes.
I’ll do the math for you: That’s $132 million to $160 million in taxes! And Sepp said the bite would be far worse if Limbaugh lived somewhere other than Florida, which has no state income tax and light business taxes. If he lived in California, the Golden Treasury State, he would have added up to 10 percent more ($40 million) to the tax tab.
That’s not counting all of the sales, property, gas and other taxes Limbaugh will be paying every time he spends a million dimes. And his penchant for cigars and other “sins” means he’ll be on the hook for even more.
Here’s the way all the liberals in the media and government should be looking at Limbaugh’s contract: He’s a one-man economic stimulus machine. Just imagine how many more pork projects will be funded over the next eight years because Rush Limbaugh got a hefty raise.
I used to think Virginia, my current home, and West Virginia, my birthplace and dream forever home, were quite different places. Western Virginians, in fact, used the Civil War as a good excuse to achieve a split that had been in the making for decades. The people on the two sides of the Appalachian Mountain range had very little in common.
Now that Democrats are in power again in Virginia, though, there ain’t much difference between west and east. This kind of news from the Old Dominion sounds an awful lot like the news I used to read regularly (and write as a journalist) when I lived in the Mountain State:
The Virginia Senate voted along party lines Wednesday to raise the gas tax by 6 cents, but officials in both parties say the measure has almost no chance in the House of Delegates, leaving many legislators to wonder whether any plan to pay for transportation will be resolved in the current special session. …
Senate Democrats ignored a proposal by Gov. Timothy M. Kaine (D), approving a plan that would raise the gas tax over the next six years, increase the statewide sales tax by 0.25 percent and boost the tax on vehicle purchases by 0.5 percent. Together, the taxes would raise $452 million annually.
That’s two different proposals with the same underlying answer: tax and spend. Makes me wanna move to Montana.
Proposals to give Americans a break from gasoline taxes this summer — and perhaps to offset it with a “windfall profits tax” on oil companies — are being roundly criticized by economic experts and pundits across the country. Here’s a selection for your reading pleasure:
— Charlotte Observer: “This is flimflam work. The plan can only hope to provide small and limited relief. … This is still sleight-of-hand chicanery. Sen. Barack Obama … is right to oppose it. So should the rest of us. What’s needed is a president with a practical energy policy, not one who’s prone to pander.”
— The Chicago Tribune: “[A] three-month break is too brief to elicit much response from refiners. They would more likely pocket the difference, leaving motorists no better off.”
— Christian Science Monitor: “The tax break would add to the federal deficit. Gas-tax revenues normally go to the Highway Trust Fund, which is used to maintain and improve the highway and public transit systems.”
— Dallas Morning News: “The McCain-Clinton ‘gas-tax holiday’ would be celebrated most fervently in the corporate offices of oil companies and in Saudi Arabia, Venezuela and the other oil-producing nations. Your 18-cent ‘discount’? That would degrade and probably disappear faster than you could say ‘supply and demand.'”
— Houston Chronicle: “What we have is a supply problem. It just seems strange to me that the people who scream the loudest about our dependence on foreign oil, Sen. Clinton and Speaker Pelosi among them, are the very ones who do everything they can to suppress production from domestic sources with repressive restrictions on offshore drilling and the building of new refineries.”
— The Mercury News: “For politicians to gain any real traction, they should bring something beyond a say-anything-for-a-vote pipe dream to the table. Be bold and call for a permanent end to the federal fuel tax.”
— Miami Herald: “The tax holiday — give-away, to call it by its real name — is a classic Washington palliative. It creates the illusion that the politicians are making the problem go away when, instead, they are actually making the problem worse. … [I]t does nothing to cure the underlying problem, which consists of an addiction to cheap gasoline coupled with wasteful habits like driving gas-guzzlers instead of gas-savers.”
— The Star Tribune in Minnesota: “The gas tax holiday is an empty political gesture that makes little sense. It wouldn’t put enough in consumers’ pockets to stimulate a sluggish economy. It wouldn’t solve the underlying problems that are sending gas prices soaring toward $4. And, by artificially stimulating demand, many energy experts believe it could send pump prices even higher when the gas tax kicks back in.”
— Tax Policy Blog: “ExxonMobil’s recent announcement of first quarter profits of $10.9 billion has prompted the predictable political demagoguery about “obscene” profits and the need for a new windfall profits tax. … If reporters were to dig just a bit deeper into the company’s earnings statement they would find that Exxon — like all the major domestic oil companies — directly pays or remits a staggering amount of taxes to governments both here and abroad.”
— The Wall Street Journal: “We tried this windfall profits scheme in 1980. It backfired. The Congressional Research Service found in a 1990 analysis that the tax reduced domestic oil production by 3 percent to 6 percent and increased oil imports from OPEC by 8 percent to 16 percent.”
President Bush and the Democratic Congress already have given Americans a tax rebate touted as an economic stimulant that isn’t likely to stimulate anything. Now politicians are tripping over themselves to offer more tax gimmicks as gasoline prices rise in this election year.
Republican presidential candidate John McCain was the first to propose a holiday from the federal gas tax (currently 18.4 cents a gallon) for the summer, and Democratic candidate Hillary Clinton has embraced a similar idea, with the twist of adding a “windfall profits tax” on oil companies to cover the lost revenue from the tax break. Barack Obama, Clinton’s rival for the Democratic nomination, has criticized those plans but countered with a call for a middle-class tax cut.
If only we voters could get a summer holiday from this kind of pandering!
I made a trip to Atlanta last week for a work-related conference. It’s a 10-hour drive and I hate to fly, so I drove and was able to take Kimberly and the kids with me.
My company paid most of the tab, save for food and tourism for the family. I didn’t include the taxes my company paid in the weekly tax bite, but I wanted to make note of it in a separate entry just to give readers a sense of how much travel can add to the expenses their companies pay.
The tax tally for my Atlanta trip:
— Hotel (Courtyard Marriott in Buckhead): $76.50, for three lousy nights!
— Gas in South Carolina (35.2 cents a gallon): $9.60
— Gas in Virginia (38 cents a gallon): $5.35
— Food: $2.39
Most of my food was covered as part of the Heritage Resource Bank I attended. Taxes most certainly were paid on those meals as well, but I have no way of calculating them.
In any case, the Media Research Center is out somewhere around an extra $100 just because of the taxes accrued on one work-related trip. Imagine the tax bite taken out of companies across America every year because of travel. The number has to be astounding.
I’m all for this idea from Republican presidential candidate John McCain:
Republican Sen. John McCain on Tuesday called for a summer-long suspension of the federal gasoline tax and several tax cuts as the likely presidential nominee sought to stem the public’s pain from a troubled economy.
I just ordered pizza, chicken strips and breadsticks from Domino’s for supper. The tab will be $20.99 thanks to the online coupon, but Aunt Virginia gets another $1.89 in taxes.
I’m also going to credit 30 cents of the $1.50 delivery charge to her because some of that fee is the result of gas and we all know how much Aunt Virginia loves to tax gas.
I’ve already blogged about the tax bill my wife and I incurred for celebrating our anniversary back in January. We went to West Virginia this weekend to mark two more happy occasions — my Dad’s 70th birthday and my parents’ 45th anniversary — and the bureaucrats were there, too.
Aunt Virginia didn’t get our money this time, though. The cash went to her cousins in neighboring West Virginia and Maryland, which we had to travel through to get home.
The sales-tax bill for the celebratory lunch at Cheddar’s near Wheeling was $4.06. The Mountain State charges 6 percent, compared with 5 percent in Virginia. We also made it a family affair, with our three children joining us at lunch, so my parents’ anniversary meal was a bit pricier than the date my wife and I had at the neighborhood steakhouse.
The entire trip was even pricier. We had to fill the gas tank twice, including once in West Virginia, which has a much steeper gas tax (31.5 cents per gallon) than Virginia (20.5 cents). And we had meals on the road Friday (Maryland) and today (West Virginia), paying 6 percent in taxes both times.
Our total tax bill to go home and celebrate with my parents was $19.96. That takes some of the joy out of the occasions.
Both of our cars were thirsty this week. We pumped 9.6 gallons into my Corolla and nearly 16 gallons into the Sienna. At 38 cents a gallon, the tab was $73.45, including $9.71 for gas.
That really is outrageous when you think about it. Every time we have to fill up our two cars, Uncle Sam and Aunt Virginia (or her cousins across America when we’re traveling) get about $10 in taxes.
After blogging is complete this year, I’ll have a hard number to give readers about how much we pay for gas taxes. But a conservative estimate at this point, based on how much my wife and I drive, is $400 a year. That’s about two-thirds of what we pay each month to feed our family of five!
And Aunt Virginia wants to rob us of even more of our income to feed her revenue appetite. Just say no to taxation with representation!
This one is personal: The tax hikers of Virginia’s General Assembly are knocking at the door for more of our money.
The state Senate yesterday voted 25-15 to increase the state tax on gasoline by a penny a year over the next five years. That means we’d be paying 43 cents a gallon instead of the current 38 cents — and that’s assuming that federal and local officials don’t increase the tax burden on gases even further.
I’d like to blame it on the fact that Democrats now control the Virginia Senate, but I voted against tax-hiking Republicans in the state during a primary not long ago. Most politicians are rotten to the core when it comes to taxes these days. We voters can’t trust any of them to keep their grubby paws off of our greenbacks.
That’s why incumbent lawmakers rarely get my vote. Most of them betray their principles and/or break their promises soon after they join “the system.”
In Virginia, lawmakers are adding tax insult to economic injury. As John J. Miller noted at The Corner: “Painfully high energy prices? An economy on the brink of recession? The Virginia Senate knows just what to do:” Raise taxes.
Editors of the St. Cloud Times in Minnesota are begging not just for the state to tax gasoline but for local officials to embrace their inner tax man. And boy, do they have some “creative” ideas.
They’re talking about wheelage taxes, street improvement districts and transportation access charges — as if those are good ideas. If the bureaucrats are going to go that far, they might as well adopt the European insanity that is the value-added tax. The goal is the same: Tax Americans at every stage of the travel process.
The editors lamented, “Oh for the good old days, when a gas tax hike was considered enough.” I say, “Oh for the good old days, when editors spoke budget-cutting truth to power instead of justifying more taxes on the people.”
Taxation With Representation 