Brian Strahle
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The Tax Foundation recently published an article about the tax proposals for each Virginia Governor candidate.  It is very interesting.  Please review it here.

According to the article, each candidate would propose to eliminate or reduce the BPOL, the Machine and Tool Tax, and the Merchants’ Capital Tax, or allow localities the option to eliminate or reduce these taxes. 

The Republican candidate states he would like to do this "while maintaining local revenue."  Ahh, the catch.  The difficulty in getting things passed or changed.  The question is - if you reduce or eliminate certain taxes, how will you maintain local revenue?  What will be increased (other taxes)?  What will go away (credits and incentives)? 

The Democrat candidate states he would propose to create a task force to identify new revenue sources for localities with the aim of maintaining local revenue.  Ahh, the task force approach.  "New revenue sources" sounds a little scary.  Hence, replace one tax with another?  When "new revenue sources" are created, they usually never go away.  Look at the Virginia BPOL tax.  It has been with us since the War of 1812.  Why?  Because once government has a revenue source, why would they ever eliminate it (unless they find a bigger revenue source)?

When you read the article, you may find yourself agreeing that you want those certain taxes mentioned to be reduced or eliminated.  The concern is always, what will replace them?  How will localities replace the funding those taxes provide? 

Under the current tax system (all state tax systems), there are winners and losers.  Even if changes are made, there most likely will still be winners and losers.  The question is - will past losers now be winners (and vice versa)?  What will be the most "politically acceptable" solution? 

What do you think?

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