Jeboch's blog

Why Virginia should repeal its income tax

I was recently asked why Virginians should support repealing the state income tax if we want our government to be able to fight back against the encroachments of the federal government.

I believe the question itself is based on two flawed premises: One, that government at the state level is inherently better than government at the federal level when, in fact, it is not any better (yet), it is only closer. And two, that our state government would be somehow unable to perform its essential functions even with significantly less revenue than it collects today.

The truth is that governments, both state and federal, will spend every dime we allow them to take from us and then some. It is up to us to determine how many dimes they may take and what we expect to get in return.

My response was as follows:

"As of this year there are currently nine states, including Tennessee and
Texas, which do not collect individual or corporate income taxes. One
could hardly say those states are failing to provide essential functions
of government. In fact, Texas has one of the lowest unemployment rates and
one of the highest economic growth rates in the country.

Income taxes are by no means the only method by which a state can collect
the funds necessary to perform its essential functions, but they are among
the most punitive taxes a state can levy against its citizens. Ask
yourself why we, as Virginians, would wish to punish those who earn money
or create jobs in Virginia?

It is true that citizens in Tennessee and Texas have complaints about the
levels of property and sales taxes that they pay, but those are taxes on
consumption, rather than production, which do not discourage the creation
of wealth in the way an income tax does.

Finally, I would point out that a 10th Amendment Revolution does us
precious little good if we win back our state's sovereignty only to find
out that the politicians in Richmond are as bad as or worse than those in
D.C. Sadly, in many respects that is the case.

By eliminating the income tax we accomplish two key objectives. We make
our state's business climate far more attractive to the sort of
entrepreneurs whose help we desperately need to create jobs and grow the
economy here in Virginia, and we shrink the pool of money that the
politicians in Richmond have to play with, forcing them to behave more
responsibly with our tax dollars than they do today.

We do not need Governor McDonnell handing out tax incentives to
politically-favored businesses, particularly multi-billion dollar global
corporations like Microsoft. Rather, he and his administration should be
working to remove the barrier to economic growth and job creation that the
income tax imposes, allowing Virginians and their hard-earned dollars to
decide what businesses will thrive here in our state."

In a state that spends nearly $14,000 per student per year on public education, only to watch more than 25% fail to finish high school, the question should never be whether the government has enough money, but rather just what exactly are they doing with it all?

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