Most liberal-left activists simply cannot support tax cuts. They can’t help it. It is in their DNA. They firmly believe that money spent by government is always better than money spent by taxpayers. They don’t understand that more money in the taxpayers’ pocket means more money spent on shoes, movie tickets, dinners out and new clothes. The economy improves when this happens and that means more money to the government without tax increases.
Ed Gillespie’s 10% across-the-board tax cut plan, the first in the past 45 years in our state, is opposed by liberal-left leaders because they believe government never has enough money.
What they don’t tell you is that the Gillespie Tax Plan will be paid for from the projected budget increases agreed to by Governor McAuliffe and the General Assembly. If those projections aren’t realized, then the proposed tax cut doesn’t take place. Pure and simple.
The Gillespie Tax Plan does not reduce current state spending. Indeed, Governor McAuliffe and the General Assembly have projected increases of $3.4 billion over the next five years. And the Gillespie Tax Plan takes only $1.3 billion or 40% of that increase, leaving more than $2 billion in new monies for basic services: schools, police, etc.
The Virginia Education Association attacked the Gillespie Tax Plan stating that it will deny public education $400 million when fully implemented. That just isn’t the case. The tax cuts will be paid from McAuliffe-approved projected budget increases. Even after the tax cut is factored into these budget increases there will be an additional $2 billion to spend and the General Assembly and the Governor will determine where that goes. Public Education spending will surely increase.
The Washington Post claims Gillespie’s plan is the same as the recent ill-fated Kansas tax cut that created financial trouble. This is not true. Unlike Kansas, Gillespie’s plan has trip-wires requiring tax cuts to be financed from the budget increases projected by the McAuliffe Administration. And when The Post does mention these trip-wires it alleges they are hidden from voters. Yet, they’re right on page one of the Gillespie Tax Plan. And Gillespie talks about this in his campaign speeches. It’s not hidden from anyone.
The liberal-left Commonwealth Institute believes higher taxes are the answer to most problems facing our state. It criticizes the 10% tax cut proposal as part of its inbred opposition to tax cuts. It says that across-the-board tax cuts produce less money for lower income people than for higher income people and so it’s unfair. But giving the citizens a 10% tax cut regardless of where they stand on the income scale, means every family will pay 10% less in taxes and every family will have that 10% in additional cash from its tax bill to spend as it wants. So of course, those with lesser incomes and who pay less taxes will have less total cash from the tax cut, but every family will be 10% better off.
The Commonwealth Institute criticizes the tax cut plan because it will give projected state income increases back to the people rather than increasing government programs. It thinks this is the government’s money and not the taxpayer’s money. As with other liberal opponents to tax cuts, it believes denying all future increases in government expenditures is a cut in government programs which, of course, it is not. No program will be reduced because of Gillespie’s proposed tax cut. To say otherwise is simply not accurate.
And the anti-tax-cut-at-all-times opposition sneer at Gillespie’s basic number for the average household income. However, a little simple research confirms his numbers on which he built his tax cut plan. The U.S. Bureau of Economic Analysis says Virginia’s disposable income was $380,075,013,000 in 2015, and the U.S. Census Bureau reported Virginia had 3,062,783 households in 2015. Simple division produces an average household income of $124,095 in 2015. Grow that by only 1.36% per year to 2021, and you get $134,578 – Gillespie’s basic household number used in his Tax Plan.
If the opponents of tax reform want to argue, they should take it up with the Feds.
When run through the tax model designed by the Thomas Jefferson Institute and the economists at the Beacon Hill Institute in Boston, the Gillespie Tax Plan is projected to create over 50,000 new jobs and more than $300 million in new business investments.
Gillespie’s proposed 10% tax cut plan makes good sense, is based on sound numbers, and will create a stronger economy and that is good for everyone. Every taxpaying family, and every small businesses that pays these same personal rates, will pay 10% less in state taxes. That’s a good deal.
(This column first ran in the Roanoke Times on October 11, 2017)