Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, December 10, 1994 TAG: 9412300065
SECTION: EDITORIALS PAGE: A-11 EDITION: METRO
SOURCE: LEONARD J. UTTAL
DATELINE: LENGTH: Medium
Who else but a Santa Claus governor would announce at Christmas time a plan to cut our income and business taxes? Isn't it just like Old Nick to tell us we have to wait until Dec. 19 to get the details? To tell reporters that they're "just like his kids; can't wait to open their presents?"
Cynical, am I? Isn't that what we've all been told we're supposed to be? And it's supposed to be different for us now with the Republican sweep of the last election? Excuse me, but only 40 percent of voters thought it worth their time to vote. In my book, that's no mandate but a sign of public contempt with a lot of politicians. Why is that?
For starters, in Virginia, voters have met "Slick" Willie, and now it's Generous George with his tax-cut goodies. If you have a family of four and make $40,000 a year, five years after Allen's plan is put into operation you'll save a little more than $300 in your state income tax. Whoopee! You can now buy that new VCR (and very little else).
Of course, if you're in the multimillion-dollar bracket - like Oliver North, for instance - you'll get big bucks in tax cuts. Poor person - now you have to get your broker to find more portfolios to buy to make more money off, but that's OK. According to the trickle-down hypothesis, it will all filter down to the less affluent folks. Sound familiar?
What about the poor? What tax relief does Generous George have for these folk of whom there are so many? The poor pay plenty of taxes. Very many, of course, don't earn enough to reach the beginning of the tax brackets. But they pay, all right: sales taxes on food and nonprescription drugs; taxes on the jalopies some manage to buy and on their utilities; etc.
When you make $15,000 to $20,000 a year, and that's all many hard-working people make, $500, $600 or $700 a year in nuisance taxes is disproportionately more than the $800 that a $40,000 family of four pays under Allen's plan after it's phased in.
And listen to this. Some of Allen's allies in the House of Delegates are putting a 1-cent increase in sales tax on the table to consider as a source to make up for some revenue loss from his plan. Instead of $4.50 tax on every $100 worth of food and over-the-counter medicines you buy, it will be $5.50. Do you recognize the pattern? The reward to those who don't need it, the burden to those who do.
Surely, Allen didn't foresee the flaws in his program and wants to be fair to the many hard-working people hovering around the poverty line, so he might be open to a suggestion on how to fix these inequities. There's a way, and quite easy. But there's a big, coddled, sacred cash-cow industry in Virginia that, up until now, would have none of it - tobacco.
Why does Virginia have the lowest excise tax on cigarettes of all 50 states; indeed, in most of the world - 2 1/2 cents a pack? Because tobacco barons want it that way. But now that they know poverty-line folks aren't going to be the prime beneficiaries of Allen's tax-cut plan, would they be willing to reassess their concept of economic justice?
Say a smoker consumes a pack of cigarettes a day, as very many do. They pay 2 1/2 cents tax a day, or less than $10 a year. How can anyone say it wouldn't be eminently fair to increase this picayune tax on cigarettes sufficiently to abolish the obscene tax on food and nonprescription drugs? There are very few other sales-tax states that don't exempt food and nonprescription drugs from sales taxes.
Which comes first, food or tobacco? Everybody has to eat, including the poor. But the tobacco industry strongly insists that smoking is purely optional, a matter of "free choice.'' Anyway, I doubt very much the cigarette tax increase needed to abolish the despised sales tax on necessary food and nonprescription drugs would be enough to drive very many smokers off the habit.
So, how about it Mr. Governor, Philip Morris, RJR, and other tobacco companies - finally, a little economic justice, and less free-riding on an unrealistic low cigarette tax in our state?
Leonard J. Uttal of Blacksburg is a retired technician in the biology department at Virginia Tech.
by CNB