Because the already below-national average corporate income
tax rates are apparently not low enough, Sen. Steve Martin (R-Chesterfield) has
used his immeasurably valuable time to introduce legislation that would get rid
of Virginia’s 6% corporate income tax starting in 2014.[1]
If Virginia’s crusading legislator for fiscal irresponsibility, Martin, has his
bill passed, Virginia would become the sixth state without a corporate income
tax.
According to Martin, “Companies would want to come here and
create jobs.”[2]
Brilliant, but aren’t companies already doing that now in what is already one
of the country’s greatest business-friendly states?
At present, the U.S. median corporate income tax is 6.9%,
0.9% higher than Virginia’s 6%.[3]
But, for Sen. Martin, less is much better, at least for some.
As Senator Donald McEachin (D-Henrico) noted, however,
“Unless he has another source of revenue, it’s fiscally irresponsible at a time
when we need an increase in revenues.”[4]
The move also makes little sense as long as Virginia remains
well below the national average for corporate income tax. The idea that by
eliminating Virginia’s corporate income tax enough businesses will come rushing
into the commonwealth to make up for the 6% corporate income tax loss is as
scientifically proven as Big Foot. So why make such a significant gamble?
That is, mystical Republican Party “trickle down” economics
may not be the best option for middle and working class Virginians, those of
whom will undoubtedly bear the brunt of any unforeseen policy mistakes in
Martin’s no-corporate income tax legislation.
Taking a quick look at the states without a corporate income
tax, one can quickly see why all but one actually have eliminated a good source
of revenue: Nevada, Texas, Wyoming, South Dakota, and Washington.[5]
For Reagan-era relics like Sen. Steve Martin, trickle-down
economics remains the best phenomenon since sliced bread. Unfortunately, only
the latter has really been a boon for economic classes across the board.
The
former has primarily benefited the affluent in our society, bypassing the lower
classes.[6]
If Martin is interested in raising revenue, a better
solution would be legalizing gambling in Virginia. This is one of many options
that are better than eliminating Virginia’s corporate income tax!
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