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By: Olympia Meola
Published: September 27, 2010 4:59 PM
Gov. Bob McDonnell didn’t break a no-tax pledge in proposing a plan for privatizing Virginia’s liquor sales, a national anti-tax organization concluded today.
“There has been much speculation that the current privatization plan is a tax increase, but in actuality this is not the case,” Americans for Tax Reform announced in a letter that endorses the plan.“Given the tax revenue projections, the current proposal does not result in a net tax increase.”
The endorsement reinforces McDonnell’s contention that his privatization plan does not increase taxes, even though it includes new and existing taxes to replace all but about $20 million of revenue that Virginia currently receives from alcohol sold by the Department of Alcoholic Beverage Control.
The state reaped $231 million in profit and excise tax revenue from ABC sales in the last fiscal year, and the governor projects it to receive about $226 million in this fiscal year.
“We appreciate Americans for Tax Reform’s support of our effort to end this government monopoly and put half a billion dollars into transportation, without a tax increase,” said Stacey Johnson, the governor’s press secretary. “They, too, recognize that privatizing ABC is a victory for the free market. This is a gold stamp of approval from a group committed to smaller government and fiscal responsibility.”
But Americans for Tax Reform, founded by Grover Norquist, faults the McDonnell plan for relying on an “onerously high” excise tax to make up most of the revenue lost from the end of the state liquor monopoly.
The plan would impose an excise tax of $17.50 a gallon on distilled spirits, which Americans for Tax Reform targeted for change before Virginia adopts the plan. The excise tax would generate $175.7 million a year, with all but $10 million transferred to the state budget. The remaining money would be used for enhanced enforcement of ABC laws.
The organization urged McDonnell and the General Assembly to reduce the proposed tax, which it said would be the highest excise tax in the region.
— Michael Martz
So its perfectly OK for the state to give away millions of dollars, raise taxes, and then not call it a tax increase. Such hypocrisy is almost beyond belief unless you consider the source..
Sep. 27, 2010 at 07:13 PM
Deal of the Day
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