Borrow, spend, yet surprise when the debt comes due are the behaviors that stain the claim to fiscal responsibility boasts of Virginia Republicans. This week Delegate Welch rolled out another half-baked idea that conflicts with the design of the very transportation plan he embraces. This trip to the tax-cut well wasn't very rewarding. Meanwhile former Governor Gilmore revealed in a radio interview that the statewide recession that took hold at the end of his term in office was at fault for the failure to complete his car tax scheme. The market economy he claims to embrace did not behave in the linear manner that he and his short-sighted tax slashing colleagues religiously recite as mantra. If you ran your personal finances that way, you'd?well you know. Math challenged Republicans are going to find this well is dry.
But Welch's most recent plan, eliminating taxes on overtime pay, relying on a model proposed by the new French leadership demonstrates a fundamental naivete (a kind choice considering the smug attitude of superiority he assumes when he discusses finances) and misunderstanding of human nature. His legislative assistant told the Virginian Pilot that the campaign would consult a third party. Who? Is this an admission that the candidate and his campaign lack the requisite acumen to tackle the issue Welch created? We don't have to assume.
First, France has a problem getting people to work a 40 hour week, much less overtime. America has a problem getting people to work at the other end of the scale. So we turn a blind eye toward undocumented workers who do not always pay taxes. We need incentives for the disenchanted workers who do not register in unemployment statistics. You know, the ones our tax dollars support. Next, the French planners believe that productivity will be enhanced simply by increasing the number of hours that workers spend on the job. It's a twist on supply side economics. In America we believe that productivity is increased by innovation and an increasingly more effective workforce. There is already in place a proven incentive to work those additional hours for both the worker and the employer: time and a half for one, and a productive incentive driven employee for the other. It works without Delegate Welch's help. Then there is the matter of revenues. The French have nothing to lose by the proposal, because the tax revenues don't exist. It's no sacrifice for the French because overtime is anathema in that economic culture. Well, here you have a tangible result. One reported by the Virginia Taxation Department: a loss of $433 million in tax revenues.
If you are familiar with the plan Delegate Welch touts, that leaves the transportation well completely dry because there will be no surplus in the general fund even in the good years used to make the optimistic projections. Those bonds he is so proud of are going to be rated well below AAA and that costs money too. Republican solution? Shift the burden to the localities, the regions. Smoke and mirrors. Create a new layer of bureaucracy and burden on local governments then reach into their pockets to fund mandates, many established by the federal and state legislators. Decry property taxes all the while making property taxes the last ready source for local revenues. Imagine proposing an increase in the sales tax!
Eventually the Republicans will be forced to dismount this hobby horse. Governor Gilmore observed in the interview that revenues decreased during an economic downturn. This despite the fact that taxes had been cut. He would likely argue that the taxes weren't cut sufficiently. See the downward spiral? But the realization is about to take hold. Remember what we heard from the President today: even "childrens do learn."
Cross posted at VBDems.org - Blogging our way to Democratic wins in Virginia Beach! Go RK!
Even sillier, though, was the reaction from Welch's opponent, Bobby Mathieson, who said the proposal sounded like a "fourth-quarter Hail Mary pass."
That's just ridiculous."
Mathieson silly. Yep, that's says it!
"...Bobby Mathieson, who said the proposal sounded like a 'fourth-quarter Hail Mary pass.' That's just ridiculous. They don't even play football in France."
Haaaa! The Pilot is making a joke. They are in a sarcastic mood following a joke of a proposal from Welch. #1 The State doesn't need computers to know when $433 million comes out of its state coffers. "Whoops", says the Pilot. "Maybe Welch could make that up by raising the taxes on everybody else, or by boosting the fees on abusive drivers."
But I think they are being serious when they start off with this editorial headline: "Blame the French for Half-Baked Idea".