Front of the line: The rich get richer in Virginia
F. Scott Fitzgerald wrote, "The rich are different from you and me." He was right about that, especially in Virginia. One way they're different here is that they don't have to wait in line.
The rich, according to the Virginia General Assembly, are certainly different from state police officers and teachers and grocery shoppers and car owners. All of those groups will have to wait for pay raises and tax cuts because of the state's fiscal crisis.
But, exhibiting more of the fiscal irresponsibility that has plunged the Commonwealth into its current desperate financial position, both the House of Delegates and the Virginia Senate have passed bills repealing the tax on estates, which affects less than one percent of Virginia taxpayers.
The estate tax applies only to those Virginians with estates valued at $1 million or more. Perhaps serving in the legislature where the talk is frequently of tens of millions or hundreds of millions or even of billions of dollars has caused legislators to lose their perspective. A million dollars still represents wealth beyond the wildest dreams to most of their constituents.
Is it fair that those constituents are being asked to sacrifice while the state's millionaires are being thrown a juicy tax break?
Sen. Ken Stolle, R-Virginia Beach, describes the inability of the Virginia State Police to pay officers competitive salaries as "a crisis." Be that as it may, it's a crisis that will have to wait for next year for a potential solution because of budget constraints.
Sen. Richard Saslaw, D-Springfield, uses similar language to describe the problems many less affluent localities have attracting public school teachers because of low salaries. Alas, these "tough economic times" mean that nothing can be done about the problem this session.
Grocery shoppers were promised a break several years ago when the General Assembly voted to phase out the tax on food, surely the most regressive state tax. However, the budget slump has frozen that phase-out for the foreseeable future.
In 1997, Jim Gilmore won swept into the governor's office campaigning against the personal property tax on automobiles. Gilmore and his supporters repeatedly, loudly, and inaccurately labeled the "car tax" the most unfair tax in the state. Now even the phase-out of the car tax is stalled because of the budget crunch.
Now some of those same tax warriors have apparently found a new "most unfair tax."
Representatives of the state police, the teachers, grocery shoppers, and car owners didn't raise a fuss about not getting their perks this year. They understand that the state is in the midst of its most challenging budget crisis in history. They believed Gov. Mark Warner and the leaders of the General Assembly when they said they were committed to getting through the budget crisis without raising taxes. Everyone agreed we have to share the pain. Average citizens trusted their political leaders to come up with a fair solution.
By asking the less fortunate to sacrifice while giving a tax break to the very wealthy, the General Assembly is betraying that trust.
Apparently the legislators think the wealthy don't like to share.
Supporters of repeal of the estate tax seem to be confused about who benefits from it. On the one hand, they say the issue is about family farms and small businesses. On the other, they say if the tax cut is not passed, the state's very wealthy residents will pick up their holdings and run off to Florida.
If members of the General Assembly were concerned about family farms and small businesses, bills were introduced in both the House and the Senate to deal with the effects of the estate tax on those groups. The proponents of repeal were not interested.
It wasn't small businessmen and family farmers, after all, who hired one of the state's largest and most expensive lobbying firms to conduct a full-court press for repeal of the estate tax. People with virtually unlimited resources did that.
The threat that the state's wealthiest citizens will leave if the tax is not passed is a typical legislative scare tactic as well as an extortion threat.
"If you don't use the coercive power of government to take money away from other citizens and give it to us, we'll take our wealth and leave, hurting your economy," rich proponents of the bill say to the legislature.
First, the argument assumes an "Economics 101" view of reality, where everyone is a rational actor motivated by purely economic concerns. Real life is a little more complicated than that. Some of those folks live in Virginia so they can be close to their grandchildren. Others like the climate here better than Florida's. Others live here because their parents and grandparents lived here, and there is nothing the General Assembly or governor could do that would ever make them anything but Virginians.
Second, if the General Assembly believes the "we'll move away" threat, it should tell those tax exiles "Good riddance. Don't let the door hit you on the way out." In times of fiscal crisis, when the rest of our citizens are being asked to sacrifice, that kind of selfish, "me first" attitude is something Virginia doesn't need.
And Virginia can certainly do without the repeal of the estate tax. That's why every concerned citizen in Virginia should urge Governor Mark Warner to veto the measure and lobby every right-thinking legislator who cares about basic fairness to vote to uphold that veto.
If Virginia's state troopers and teachers can wait for their raises, and Virginia's grocery shoppers and car owners can wait for their tax breaks, then Virginia's millionaires can wait as well.
Kathy Rowles is the chairperson of the Virginia Organizing Project, a statewide citizens' group.