With the closest thing you’ll ever see to consensus in Virginia politics the abuser fees provisions are very likely to be repealed in the next session. Now, as Chap asks, what are we going to replace that funding stream with?
There are a number of options including an increase in the income tax, sales tax, a renewed estate tax, gas tax, user fees, etc. (I’d be interested to see what the revenue and distribution effects would be if we raised the threshold for the top rate from $17,000 to $40,000 and simultaneously raised that rate from 5.75% to 6%- cutting taxes by .75% for all dollars earned between $5K-$40K, and raising taxes by .25% for all dollars earned over $40K.)
My first plea is for the leaders of the commonwealth to avoid what seems, at first blush, like an elegant solution: the gas tax. As I recently reported, the last several years have seen a promising revival of tax fairness. We’ve moved from having one of the most burdensome tax systems for the working poor to around average in the country over the past 7 years.
Why would we strengthen the flat tax aspects of our tax scheme now?
brimur.wordpress.com 
July 17, 2007 at 10:47 am
Great post, brimur! The gas tax is one of the most regressive taxes which we can impose. The only excuse to implement such a measure would be the same excuse we’re currently hearing from our legislators over the new abuser fees: uhhh, well we had to do something!
No excuse! Thanks for hitting the nail on the head!