In a move that was best described by Norm at TQ (a “rude gesture”), Tim Kaine is proposing to balance the budget with an income tax increase (Washington Post). Virginia Republicans, led by Governor-elect McDonnell (WaPo) are already busy tearing it apart, but one thing that has been lost is the damage an income tax does to incentives to work and invest. Especially in Virginia, which has a heavy technology sector, a tax that slwos down work and investment is a double-whammy.
One interesting factoid about this sent me into other directions (Richmond Times-Dispatch):
Virginia’s income tax, currently 5.75 percent, has not been raised since 1972.
Two things jumped out at me. First, that Kaine basically got this idea from the last Governor who did it – his father-in-law, Linwood Holton.
Secondly, Holton just happens to be the first Republican elected Governor in the history of Virginia (a Readjuster was elected in 1881 and called himself a Republican in 1884). In my travels as a candidate for office, I found legions of older Spotsylvanians who opposed tax increases and runaway spending – and supported me – while still calling themselves Democrats. Now I know why.
Cross-posted to RWL
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