Like most Americans, I have made sacrifices during this economic downturn. We have all endured severe budget cuts at the federal, state and local level that impact our lives in a variety of ways. If we are spending additional tax dollars at a time like this, we must be sure that it will lead to future economic prosperity. The problem is that extending the Bush tax cuts for the wealthy will not create jobs and future prosperity and will cost $700 billion over the next ten years. It will simply give the rich an extra tax cut they do not need. In the nine years of the Bush tax cuts, the U.S. has had the worst rate of job creation since the government began keeping records.

This weekend, I hope that Sens. Warner and Webb will cast a vote for jobs by ending the Bush tax cuts for the wealthy and extending them for the “rest of us.”

Sandra Cook is the chair of the Charlottesville-based Virginia Organizing Project.

“The role that we play is helping citizens be able to know enough about what bothers them to be able to verbalize that to the power-brokers,” said Janice “Jay” Johnson, the chair of the Charlottesville-based Virginia Organizing, which is celebrating its 15th anniversary this month.

“Citizenship is an active role, not a passive role. We’re here to support people being active in their communities,” said Johnson, who got involved in Virginia Organizing in Newport News 10 years ago because she was “looking for a way to get involved” and wanted to do more than sit around and talk and drink coffee and call that being involved.

The civic awareness and sense of civic duty that the Founders had as the cornerstones of their American experiment compete in our modern American life with work and careers and family and recreation and entertainment.

Just keeping up with the daily news can be tough, and being able to do more than yell at the TV when elected leaders do something dumb is a challenge.

“What happens is we elect people to represent us at the state and national levels and then tell them to go do their thing. But their thing isn’t necessarily the citizens’ thing,” Johnson said. “Citizens elect these people, and then they give them power. We give the power to them, and then we’re afraid to talk to them about what we really need. So then citizens feel helpless. They feel powerless to do anything. Unless they’re able to say what it is that is bothering them and they think needs to change, then they aren’t going to be listened to.”

Virginia Organizing provides people with the tools they need to empower themselves to action.

“A lot of people have things that bother them or affect them in terms of the communities they live in, but they don’t know the background of the issue or the history or what the possibility of change and what things would look like if there was change. What we do is talk with people about what they see are the issues and help them set priorities for what it is they really want to work at getting to happen and strategies for effecting change,” Johnson said.

An important part of what Virginia Organizing does is help people “find the people who can make that change,” Johnson said.

“It can be school boards, it can be state elected officials, it could be the local housing authority, it could be local businesspeople. You have to find out who your allies are,” Johnson said.

Efforts are ongoing on issues including health-care reform, financial reform and predatory lending, to name just a few of the topics that have Virginia Organizing’s attention.

Anniversaries are good times to think about what has been done to date and what will be done in the future. The future of Virginia Organizing, Johnson said, “is doing more of what we’re doing now.”

“The work never really stops,” Johnson said. “There’s always something going on that needs to change. The way the state looks at its revenue situation needs to change. We have an administration that’s looking at getting rid of revenue-producers instead of looking at ways to produce more revenue otherwise. We have to look at the perspectives and priorities of the administration of the state and whether it’s doing what is in the best interests of its citizens and where people are with that and the concerns that they have.”
 
 

Story by Chris Graham. Chris can be reached at freepress2@ntelos.net.

Story by Chris Graham

Carl Tate looks at it as reinforcement.

“It reinforces my promise to the citizens of Staunton not to vote to raise their taxes,” said Tate, a candidate for Staunton City Council, who made news in his upstart campaign with his April 8 announcement that he had signed the Taxpayer Protection Pledge of the conservative Washington, D.C.,-based Americans for Tax Reform.

His opponents in the all-at-large election, incumbent City Council members Carolyn Dull, Bruce Elder and Lacy King, can almost be said to speak with one voice on the wisdom of what critics refer to as the “no-tax pledge.”
 

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“The no-tax pledge reminds me of that old saying, Never say never,” Dull said. “Just as sure as we would take that pledge, there would be something crucial that needed to be done. I just think philosophically that I could never do that. I want to keep my word, and there may be circumstances that you can’t foresee.”

“You can look at the two states that have a Taxpayer Bill of Rights, California and Colorado, and right now those two states are on the brink of bankruptcy. For a local government to do this would be incredibly reckless,” Elder said.

“I’ve learned over the years that you don’t ever say never. Because you never know what’s going to happen,” King said. “The last thing I’d want to do is put myself in a position to where if we continue to receive cuts that we’d have to put our public safety, our infrastructure and education in jeopardy by refusing to do what’s right.”

And sometimes doing what’s right is raising taxes to account for gaps in revenues needed to maintain acceptable core-service levels.

“If you do it the right way, there are many instances in which tax increases would be the best way to go economically. And this isn’t just for poor people or teachers or public servants who are underpaid. It’s good for the whole economy. Including for the private sector as well,” said David Shreve, an economist with the Charlottesville-based Virginia Organizing Project.

The impact of budget cuts on service delivery is a given, if one that can be hard to quantify. A more tangible impact is seen in the form of the cuts in government-sector jobs that can have a ripple effect on a local economy akin to the loss of a business or industry.

“Proponents of these pledges pretend that any tax in any form is a net negative in terms of its economic effect. History has proven over and over again that that’s just not true,” Shreve said.

“The way you pay for public services is essentially a tax – whether you call it a fee or even tuition at a public college or university. No-tax pledges are a sort of head-in-the-sand approach to taxation,” Shreve said.

The battle on these points extends to even the basics of the framing of the issue at hand. Notice how the critics refer to the pledges as “no-tax pledges” while the advocates have framed them as “Taxpayer Protection Pledges.”

“These pledges clearly have some rhetorical appeal,” said Michael Cassidy, the executive director of the Richmond-based Commonwealth Institute for Fiscal Analysis. “Their proponents present them as a simple signal to voters of the ideological position of the candidate. And that may hold some appeal in the context world that we live in, in that there’s this pledge that I’m never going to raise your taxes, that I pledge that I will oppose any and all efforts to increase taxes.

“The problem is that life is complicated,” Cassidy said. “We live in a complex and large economy, and a very diverse and growing community. The challenge is, how does a public official actually deal with the challenges and opportunities of that community responsibly if they’ve chosen to ignore a whole host of tools and options that they may have?”

Nathan Pick, the state affairs manager at Americans for Tax Reform, bristles at the critics on that point.

“This idea that they want to say that it ties their hands, well, if it ties their hands, it ties their hands from raising taxes,” Pick said. “That’s the commitment that you make to the taxpayers, and the taxpayers appreciate it. If you can keep revenue in check, it keeps government from growing.

“Critics like to say, OK, it’s irresponsible, because you can’t spend money when you want to. Well, they spend too much, and it’s responsible to keep taxes low so your city can be a city where businesses want to locate, where families want to live. There’s nothing irresponsible about that,” Pick said.

“People are taxed enough. The Taxpayer Protection Pledge is a line in the sand, saying, If you vote for me, I won’t raise your taxes,” Pick said.

Tate said he decided to sign the pledge after reading a newspaper article quoting members of City Council saying that they didn’t want to raise local taxes this year to deal with a potential budget shortfall, but economic circumstances were maybe forcing their hands on it.

“That kind of bothered me. Some of my opponents are playing this game where they’re trying to appear to be against higher taxes, but in the end they’re going to raise them. I don’t want there to be any question where I stand on that,” Tate said.

“I want to be clear that there won’t be a situation for me where I don’t want to vote to raise taxes, but I’ll vote to do it anyway. I won’t vote to raise taxes. Period. End of discussion,” Tate said.

“City governments have very, very tight budgets,” Elder counters. “About 85 or 90 percent of our budget has a state or federal mandate attached to it, so there’s not a lot of room for tweaking. We can’t tweak the number of special-needs kids in our schools, or the number of elderly people in our communities that need services.

“If you have a community of people between the ages of 30 and 50 who are all affluent, a no-tax pledge would be fabulous. You could operate for almost no money at all. But that’s not the reality,” Elder said.

Dull was more succinct in her final thought on the pledge.

“I think it’s better to just say, Don’t have a tax rate that’s any higher than you have to have to provide what our citizens need,” Dull said.

Story by Chris Graham

Mike Harris has tried to seize the momentum in the marquee race in the upcoming May 4 local elections with a proposal that revolutionized government budgeting 40 years ago.

It’s called the zero-based budget, and the idea is that budget writers start their work on fiscal plans with the assumption that they don’t have a single dollar to spend that is guaranteed, and that they’ll have to justify every penny they ask for as they seek ways to continue providing public-sector services like police, fire, rescue, trash pickup and others.
 

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The most serious limitation to the zero-based budgeting concept, which fell into disfavor in the 1980s: “The assumption built into a real, genuine zero-based budgeting approach is, well, maybe we don’t need to spend any money on public schools. Let’s start with zero, and make the public schools justify every dollar they get from us. One could realize immediately what a silly exercise that would be. Do we really need to build roads and maintain them?” said David Shreve, an economist with the Virginia-based Virginia Organizing Project.

“I’m exaggerating a little bit, but only to make the point. If you want to question the way in which we maintain roads and the way in which we can change school budgets, to build incentives for student performance, better teaching, that’s not zero-based budgeting. That’s the way we’ve always done budgets, by changing them on the margins,” Shreve said.

And therein lies the rub with the plan from Harris, who did not return a message seeking comment for this story. His opponent for the Ward D seat on Waynesboro City Council, incumbent Lorie Smith, notes how a zero-based budget could work in private business, “where if you’ve got a department that isn’t doing well, it’s not functioning, it’s not complementing the bottom line, you can just do away with that department and move on to something else.”

“But with a municipal budget, we just can’t look at a particular service and say, Well, our bottom line doesn’t look like it should, so we’ll just eliminate the service,” Smith said. “What we need to do is we need to roll our sleeves up and do what we’re currently doing, and have been doing, and that’s budgeting line item by line item, and understanding what it takes to deliver services here in Waynesboro, and that the taxpayers’ dollars are being maximized to provide those services.”

That’s called performance-based or results-based budgeting, and it’s the concept that sprang from the ashes of the failed zero-based budgeting experiment of the 1970s.

“That’s where you have a process by which the public sector engages in some strategic planning around what the organization’s mission and performance goals are. And then you figure out, How do we measure that performance, and what do we benchmark against? The idea is that using the budget system to allocate resources based on results holds agencies responsible for budgetary outcomes,” said Michael Cassidy, the executive director of the Richmond-based Commonwealth Institute for Fiscal Analysis.

“Zero-based budgeting has been discounted as not being an effective way at getting at the core issue, which is getting the result out of the public investment that we need,” Cassidy said.

Michael LaFaive, the director of fiscal policy at the Midland, Mich.,-based Mackinac Center for Public Policy, has a different view on the efficacy of zero-based budgeting as a concept. He thinks it can work as people like Harris suggest in making government more accountable for the dollars that it spends, but with a caveat.

“The success of such a change like this hinges strongly on leadership that is dedicated to the task. If those appointed to conduct budget reviews are unwilling to truly assess every item in their budget, word will get out quickly that this new budgeting technique is more symbolism than substance,” LaFaive said in 2003 testimony to the Michigan state legislature.

LaFaive reaffirmed that sentiment in an interview with AugustaFreePress.com this week. And not only must the governing body be committed to a thorough budget review, but it will also have to accept a narrowed scope with a focus on one or two departments a year even at that to make sure that the review can get the attention that it deserves.

“The reason you do not want to adopt an across-the-board zero-based budgeting program is you couldn’t possibly hire enough accountants to get it done. There’s just too much going on. If you zero in on one budget per year, you can work your way through these programs or departments with the type of care that you should run through them,” LaFaive said.

Smith points out the reluctance of City Council to commit to anything resembling the schedule of budget reviews that were the order of the day in the administration of former city manager Doug Walker.

“I can tell you that over the last two years my requests have not been met to have Council meet and review the budget in a very detailed manner. We just don’t have a Council that wants to do a thorough review of the budget,” Smith said.

“We need to remember that the way the city-manager form of government works is we task the city manager with the job of bringing a budget to us, and then it’s up to us to take the budget as presented and tear it apart at any level that we wish to do so. That’s the way this process needs to work, and we can do a better job to make it work,” Smith said.

Special Report by Chris Graham
freepress2@ntelos.net
 

The push toward tax reform that caught up in its inner workings the sitting governor and a future governor among its bipartisan leaders fell surprisingly silent after 2004, much like the tree in the woods with no one there to witness if it actually makes a sound.

After the much ado about making Virginia’s tax system fairer by taking the burden off local real-estate taxes and putting it more into state income taxes, we’re still sitting pretty much where we were when tax-reform proponent Mark Warner took office as governor in 2002, if we haven’t actually done some backsliding.

“There has been a tendency particularly in light of the no-tax pledge in shifting away from general-fund taxes to fees. And that’s had a significant impact in that a lot of the fee structure that we have in place tends to be a bit more regressive, if you will, than just general-fund taxes. And now the expert gurus who have been so adamant in their opposition to tax increases are broadening their focus to include fees, too. So now people who sign the no-tax pledge have to get permission from Grover Norquist and others before they can do a fee now and make sure that they’re not going to be chastised. Which is sort of silly, but it’s where we’re at right now,” said Emmett Hanger, an Augusta County Republican state senator who joined with Warner and then-State Del. Bob McDonnell and others in 2003 and 2004 on the Virginia tax-reform effort that can claim some victories in the 2004 budget passed by the General Assembly and signed into law by Warner, now a United States senator.

The tradeoff included raising the state sales tax a half-cent to balance a cut in taxes on food, but the effort fell far short of the original goal of having the state take the burden off local property taxes. If anything, the $950 million cap on reimbursements to localities included in the state budget beginning in 2004 to account for an inflating bottom line associated with the ill-conceived personal-property tax relief that Jim Gilmore rode to victory in the 1997 gubernatorial race has made things that much tougher for local governments.

“The car tax is just terrible policy the way it’s being administered, with that $950 million credit in the state budget that’s parceled out to the most affluent localities in the state at the expense of the less affluent localities. It’s a reverse Robin Hood principle, in a way,” Hanger said. “We would be better off in terms of the bottom line to individual taxpayers if we hadn’t done that. if that $950 million were taken and just distributed through the funding formulas to the local governments, instead of just rewarding Fairfax County, which gets about 30 percent of that money by itself, we would all be much better off.”

So where are we in terms of anything that could be coming anytime soon in the area of meaningful tax reform? Start with nowhere, and you’re starting at the right place. The no-tax wing of the Republican Party is no more willing to stand idly by as legislators considering increasing income taxes as part of a tradeoff allowing local governments to enact deep cuts in local property taxes today as it was six years ago.

The end result: “The tax system in Virginia is not meeting its basic purpose, which is to provide adequate revenue for the public sector to be able to provide the services that people expect the public sector to provide, like education and health care,” said Michael Cassidy, the executive director of The Commonwealth Institute for Fiscal Analysis, a Richmond-based progressive think tank.

“We’ve seen significant revenue shortfalls as a result of the very deep and prolonged national recession, and we’ve essentially taken a cuts-only approach toward addressing those shortfalls. But when you look forward, the fundamental purpose of a tax system is to provide adequate revenue for the core services that the public expects, and we see that that really is not happening in Virginia, and that we need to look at the core issue, which is the tax system itself,” Cassidy said.

Looking back to 2004, the momentum toward substantive tax reform in Virginia was derailed first by the mini-boom of the middle of the decade, which took pressure off policymakers from a revenue perspective, then by the recession that began in December 2007 that has been answered with the supposed conventional wisdom that “you don’t raise taxes in a recession” even as part of a tax-reform quid pro quo.

“How do engage in a constructive dialogue on this core issue when people on one side have dug in their heels and taken a very strong antitax posture that says any kind of an increase of any sort is verboten? Even if it’s part of a greater package that lowers taxes for most people, makes the overall system more equitable, more fair, and in doing so raises relative taxes on just a segment of the population, it’s hard to reach a consensus on the kind of reform packages that do those things when you have participants drawing lines in the sand,” Cassidy said.

The lines being drawn, not surprisingly, benefit the wealthy at the expense of the working class. According to data from The Commonwealth Institute for Fiscal Anaylsis, Virginians earning $19,000 a year or less pay 50 percent more of their income in state taxes on a proportional basis than do those making a half-million dollars a year or more.

“When we’re taxing a larger share of the income of low-income folks, we’re not only making life that much more difficult for folks who are struggling to make ends meet to begin with, but also they don’t have much income, and so we’re orienting our tax system in a way that’s not going to be able to meet the demands and growth of our population and our economy,” Cassidy said.

And we get the added bonus of keeping the pressure on local property taxes and on the state’s gas tax, which hasn’t been adjusted since 1986 even in the face of myriad funding shortfalls that have cut to the core ability of the Virginia Department of Transportation to be able to maintain state roadways.

“What we think all Americans ought to recognize is that since all tax originates with income, and as Adam Smith opined many, many years ago, when he wrote The Wealth of Nations, that the best tax system is one that is geared toward the ability to pay, and we still think that’s true, the income tax is still the one that works the best, and it’s the one through which you can actually generate the most revenue with the lowest rates for the most people. So if you truly want low rates, and you want low rates that are diffused as widely as possible through the population, then you really have to have a progressive income tax as a principal component of your structure. The antitax movement focuses on the income tax specifically, and it doesn’t deliver low taxes as a result. It simply shifts them to other forms,” said David Shreve, an economist with the Charlottesville-based Virginia Organizing Project.

“What we argue, I think persuasively, is that those other forms are less productive, they’re less fair, they do the exact opposite of an income tax, in that you’re almost guaranteeing that you have to have higher rates for more people because those revenue forms aren’t as productive, they’re not geared to the modern economy, either its needs or the income it generates, and you’re always on a treadmill. You’re just sticking your finger in the dike year after year, and you’re engaging in what Russell Long, the late, great senator from Louisiana, once decried as the tax policy of don’t tax you, don’t tax me, tax the man behind the tree,” Shreve said.

Hosted by Chris Graham

Today’s AFP Show features an interview with AFP editor Chris Graham and economist David Shreve. Shreve joins the show to talk about a report released Tuesday by United for a Fair Economy and the Virginia Organizing Project looking at what states should do in terms of fiscal policy to address their ongoing issues with budget shortfalls.
 

[audio:http://media.libsyn.com/media/thenewdominion01/AFP_SHOW_Dave_Shreve.mp3]

As U.S. mayors gathered in Washington this week to meet with the Obama administration about unemployment and the economy, Virginia local government officials and community leaders are calling for the creation of a Community Jobs program.

The jobs program would provide funding to localities across the country to create 1 million temporary public and private sector jobs. Congressman Keith Ellison from Minnesota has introduced HR 4268, The Put America to Work Act of 2009, in the U.S. House of Representatives to authorize a Community Jobs Program. The bill has 52 co-sponsors. Community groups and local government officials are working with partners around the country to organize in support of this bill, and to ensure that it becomes law.

Advocates for the legislation stress the urgency in creating new jobs. Since December 2007, when the recession began, the economy has shed 7.2 million jobs. In December 2009, the national unemployment rate was at a staggering 10 percent.

The Community Jobs Program requires local officials to work in conjunction with local residents to identify critical community needs and to create jobs that will address those needs, such as restoring vital social services and improving community infrastructure such as schools, community centers and parks.

“I support a federally-funded, community-based jobs program in partnership with the city and small business. Let’s get the thinkers in the room and come up with a game plan to beat back this economic tsunami. We need to create local jobs and generate new revenue and not stand still and be road kill,” said Marty Jewell, Richmond City councilman.

The Jobs Program would implement a two stage approach to ensure immediate job creation and allow for a longer-term planning process that involves community input and a focus on education and career development. In order to put people to work right away, during the first six to nine months of the program, job creation would include rehabilitating schools, community centers, and libraries; cleaning up vacant and abandoned properties to alleviate blight; expanding emergency food programs; expanding staffing in Head Start, child care and other early childhood education programs; and renovating and maintaining parks, playgrounds and other public spaces. After the fast track, job creation initiatives will be selected through an open, competitive process that includes community participation and prioritizes projects that integrate education and job skills training.

“A community jobs program would reduce crippling unemployment and invest in local infrastructure,” said Charlottesville Vice Mayor Holly Edwards. “Investing in infrastructure means fixing roads, building affordable housing and rehabilitating schools. But investing in infrastructure also means strengthening local families. Putting people back to work would strengthen local families by giving every family the financial security they need. We know that creating jobs is the only way of moving people out of poverty. We have the to-do list, we just need the funds.”

Local government officials support a Community Jobs Program where everyone benefits -those who get jobs and those who use the facilities or services that will be improved through those jobs.

“It is incredibly important that we produce local jobs and get people in the community back to work. There are great possibilities to create local jobs on green energy or jobs supporting the light rail, but you need help to get the ball rolling. Local governments cannot do it all on their own,” said Hopewell Councilwoman Christina Luman-Bailey. “I would like to see a program that provides local jobs for local people, not just bringing in contractors from other places. This will help put people back to work and create a positive infrastructure for the future.”

For more information on the Community Jobs Program: www.jobs4americanow.org/wp-content/uploads/Community-Jobs-Proposal-Leave-Behind-12-17-2009.pdf.

Staff Report
News Tips: freepress2@ntelos.net

Ten Virginia civil-rights and faith-based groups have joined together to ask Gov. Tim Kaine to issue an executive order that would restore voting rights to most or all of Virginia’s 300,000 individuals who are being denied the right to vote because of a felony conviction, and to put in place a process for automatically restoring rights to others who complete their sentences in the future.

The letter sent earlier today is signed by the following organizations: NAACP Virginia State Conference, Virginia League of Women Voters, Virginia Interfaith Center for Public Policy, Virginia Poverty Law Center, Virginia Organizing Project, STEP-UP Inc., Virginia CURE, The Northern Virginia Coalition, American Civil Liberties Union of Virginia, and The Rutherford Institute.

Many other Virginia organizations, including the Virginia Catholic Conference, the Virginia Conference United Methodist Church, the Old Dominion Bar Association and Delta Sigma Theta Sorority Inc. State Social Action Task Force have also called for reform of Virginia’s felon disfranchisement law.

Only Virginia and Kentucky permanently disenfranchise all felons upon conviction, requiring an act of the governor to restore voting rights. Of the 48 other states, two never remove voting rights and most automatically restore rights upon completion of prison sentence, parole or probation.

Gov. Kaine has been asked numerous times during his tenure as governor to take action to modernize Virginia’s voter restoration procedures. Advocates are hopeful the he will follow the lead of the Democratic governor of Iowa and Republican governor of Florida, both of whom took executive action in the last few years to reform their state’s felon disfranchisement policies.

Most of the groups signing today’s letter were present at a Dec. 2 meeting with the governor’s top staff to ask for the issuance an executive order, and most have been asking the governor to take action to reform Virginia’s disfranchisement law since taking office. While meetings with the governor and his staff have led to promising conversations about felon

disfranchisement reform in recent weeks, the governor has not yet stated he will act before leaving office.

Under the Virginia Constitution, only the governor has the power to restore voting rights. In practice that has been accomplished through a cumbersome application process resulting in a few thousand individuals having their rights restored during the term of recent governors. Scholars, however, say the governor of Virginia, like those in other states with similar constitutional provisions, has the power to issue a blanket restoration order that would grant voting rights to everyone who has lost them.

While many states instituted permanent felon disfranchisement during Jim Crow, in recent years all but Virginia and Kentucky have reformed their disfranchisement laws. Studies indicate that felons who vote are half as likely to be re-arrested as those who do not, a finding that has caused pragmatists from across political party and ideological lines to support felon disfranchisement reform

“Every state in the nation, except Virginia and Kentucky, has figured out how to rid itself of this shameful and counterproductive legacy of Jim Crow,” said ACLU of Virginia Executive Director Kent Willis. “In states where legislators have dragged their feet, governors have acted through executive orders, and that’s what we’re asking Tim Kaine to do before he leaves office.”

“Gov. Kaine has the opportunity to make history and reverse one of the last vestiges of Jim Crow segregation. It is time Virginia joins the ranks of the 48 other states who restore voting rights for former felons when they have paid their debt to society. The governor is getting thousands of calls in favor of restoration of rights because people are outraged that we still have this archaic policy on the books. We have met with Gov. Kaine’s staff and have provided ample evidence that he has the power to sign an executive order to restore voting rights for former felons. Now, the question is simply: ‘Will he do the right thing?’” said Janice “Jay” Johnson, Chairperson of the Virginia Organizing Project.

“There is nothing more sacred than the right to vote,” said John W. Whitehead, president of The Rutherford Institute. “When someone has paid their debt to society, that right should be restored.”

Local members of the Virginia Organizing Project are hosting a health-care vigil at Court Square in Harrisonburg Tuesday evening.

The vigil is scheduled for 5:30 p.m. on the east steps of the Rockingham County Courthouse in Downtown Harrisonburg.

The vigil will shine a spotlight on the thousands of Americans in our community who cannot afford to pay the costs of their medical bills and are being forced in to bankruptcy.

The vigil is part of a nationwide event on Tuesday, with over 250 vigils planned across the country. Community members will light candles to remember the 45,000 people who die each year in the United States because they lack health care.

If you believe the partisan rhetoric, it’s the wealthy who bear the tax burden, and who are deserving of tax breaks to get the economy moving.

A new report by the Institute on Taxation and Economic Policy and the Virginia Organizing Project puts the rhetoric in a new light.

Low- and middle-income Virginians put out significantly more of their income in local and state taxes than the average Virginia millionaire, according to the report, which was released today.

Millionaires pay out 6.3 percent of their income in local and state taxes, according to the report, while low- and middle-income Virginians pay 8.9 percent and 8.8 percent of their income in local and state taxes, respectively.

The reason for the disparity isn’t hard to figure out.

“Put simply, Virginia and other state governments get the lion’s share of their revenues from three types of taxes – income, sales and property. And only one of them, income tax, can really be designed in a way that is fair. The other two, especially sales taxes, but also to a lesser extent property taxes, are inherently regressive, by which I mean they inherently fall most heavily on low-income families,” said Matthew Gardner, the executive director of the Institute on Taxation and Economic Policy and the lead author of the study.

___________________________________________________________
Denise Smith of the Virginia Organizing Project on tax fairness (4:59)
[audio:http://media.libsyn.com/media/thenewdominion01/DENISE_SMITH.mp3]
___________________________________________________________
  

Low- and middle-income families tend to spend most or all of their income getting by week to week, and thus are hit hardest by what are flat sales taxes that are the same for everybody no matter income levels. Property taxes are also a bigger issue for low- and middle-income families because, as Gardner explains, “Your home is often the biggest and only real asset you’ve got. And as your income goes up, of course the value of your home keeps going up, but it doesn’t keep pace with the growth in your income.”

“The personal income tax can be adjusted to be precisely as fair as you want it to be. By changing the rates, by changing the tax credits you allow. It’s a much more manipulable tax, from a tax-fairness perspective,” Gardner said.

This flies in the face of the contention of some conservatives to advocate for a flat income tax as being ultimately fair by setting a single tax rate across the income spectrum. Going that route, this report suggests, would make the tax system that much more regressive, and also hamstring local and state governments in their efforts to maintain a basic level of service in the core service areas.

“What we overlook in this when we talk about fairness first is that when you have an upside-down system as we have in Virginia, you don’t get a kind of a revenue system that can keep up with the needs of a modern state for public investment, in public education, transportation, health care, public safety, to name just the major categories. Also we neglect to construct a tax system that can help to generate rather than stifle economic activity. In my mind, those two things go along with fairness, or if you have no fairness in an upside-down system, your system always fails to do those two things,” said David Shreve, an economist and a member of the Virginia Organizing Project’s Tax Reform Committee.

The Project recommends reforming Virginia’s tax system to better serve Virginia’s families as well as the state budget.

“Virginia’s tax structure has not changed since 1926. Our regressive tax system is hitting working families hard. We cannot keep going like this. We all keep waiting for the wealth to trickle down, and it’s not happening. Where is it?” said Denise Smith, also a member of the Virginia Organizing Project Tax Reform Committee.

“Meanwhile low- and middle-income people are struggling to get by in this economy while paying a higher percentage of overall taxes than the wealthiest people in the state. Tax percentages should be determined by ability to pay.”