Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, January 30, 1992 TAG: 9201300397
SECTION: EDITORIAL PAGE: A11 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Long
BEYER'S TAX-CUT PROPOSALS PROVE TALK IS CHEAP
GIVE LT. GOV. Don "Skippy" Beyer credit for sailing against the wind. At a time when practically every Democrat in Richmond wants to raise taxes, he wants to cut them. Not by much, mind you, and under the protective coloration of economic growth.But give Beyer credit for being shrewd. Such proposals as he has laid upon the table are not enough to raise the ire of the tax-and-spend crowd, but just enough to get chamber of commerce types salivating at the prospect of a Democrat who talks their language.
For those who forget, Beyer is the Northern Virginia Volvo dealer who came from nowhere under the propulsion of close to a million in family money to claim the state's second highest office in the Democratic sweep of '89, and promptly disappeared.
Such pronouncements as he made in his first year in office ("There are things more important than Virginia's AAA bond rating.") were not designed to endear him to the Main Street mullahs who had long viewed Attorney General Mary Sue Terry as the ideal Democrat. That is, one who could always be depended upon to run with the liberal hares when it didn't particularly matter and hunt with the conservative hounds when it did. O There was a time when
Beyer looked to be considering a run against Terry, but lately he has seemed to shrink from the terrible task of fighting her from mass meeting to mass meeting the way Jerry Baliles and Dick Davis went at it in 1985. Beyer allowed the other day that he might have a possible interest in the U.S. Senate. Translation: Would Chuck Robb really dare to run again in 1994?
Beyer's entry into Virginia politics came well after my tenure in Richmond, so all I knew about him was that he was a rich and clever young man. Considering his come-from-behind victory over the GOP's state Sen. (and former first lady) Edwina Dalton, the temptation was to regard Beyer as some kind of superman. That notion was disabused when I stayed behind after my own brief remarks to a recent conclave of the Virginia Municipal League to hear Beyer's offering.
In the manner of a TV spokesperson, some fiend has convinced Beyer that he ought to grin as he talks - hence my chosen moniker for him of "Skippy." But the amazing thing was the consistent vacuity of what he had to say. He informed us, for example, that Wall Street was now a ghost town.
Nothing that Beyer said on that forgotten occasion was quite so ridiculous as his recent proposal to encourage capital formation in this state by exempting the first $250 in interest earned on personal savings. That would save the typical taxpayer the munificent sum of $10 a year while costing the state treasury more than $20 million a year.
Anybody who believes that Beyer's interest-exemption will cause Virginians to rush out and add a thousand to their passbooks is likely to believe a great many other things equally untrue. But 22 state senators (out of 40) have signed on as patrons. As a courtesy to Beyer - who presides over the Senate - a majority of that body may let it out, thinking the House will kill it.
Beyer's other proposal, to provide a credit against corporate taxes for investment might make sense if it were large enough to be interesting. He wisely backed off from proposing a partial exemption for capital gains on the Virginia return and for the establishment of a Virginia IRA tax shelter.
The reason it was wise is elementary. With federal taxes on capital gains and other income going as high as 31 percent - and likely to go higher - here is the tax domain that guides decisions relative to taking capital gains or establishing an independent retirement account. The Virginia income tax of 5.75 percent is strictly the caboose on the tax train, and you will not change the direction of that train by trying to put the caboose in front of the engine.
Never mind that Beyer has served up distinctly small beer unlikely to go very far or do very much. The political bottom line is that the suspected Northern Virginia liberal is taking a pro-business line that may be remembered in certain quarters. With his governor and fellow Democrats - at last count - touting 20 ways to raise your taxes, Beyer has now established a modest identity separate from that.
But if we really want to improve the business climate in Virginia there are far better ways than Beyer's nickel-and-dime approach. While our state corporate income tax is not exactly high at 6 percent, we could lower it. Taking it down to 5 percent wouldn't cost any more than Beyer's gimmicks, and having one of the lowest corporate tax rates in the nation would be a better talking point with business prospects than a small tax credit that might be withdrawn at any time.
If we really want to get business excited, why not treat dividends to shareholders as legitimate deductions from corporate income - as most nations do. The double taxation of dividends in this country is something that really riles intelligent investors.
And if we want corporations to domicile in Virginia, we could take a leaf from Delaware's book and establish (at modest cost) a special court that would promptly hear and adjudicate corporate civil suits. There is nothing that is so great a nightmare to business today as the prospect of protracted and costly litigation before courts of incompetent jurisdiction.