The Virginian-Pilot
©
RICHMOND
The House of Delegates narrowly defeated a proposal Tuesday to phase out a source of revenue that many Virginia localities depend on to fund schools, police and other services.
Del. Bob Purkey's bill, HB613, would have gradually eliminated the machinery and tools tax, levied on manufacturing equipment, by exempting all equipment purchased after July 1.
The measure was rejected 50-48 after several delegates warned that it would hamstring cities and counties at a time of looming cuts in state funding.
The tax raises about $200 million a year statewide.
Purkey, R-Virginia Beach, called his measure a "jobs bill," saying phasing out the tax would attract new manufacturers to the state. If the tax stays on the books, he warned, "you can sit and watch the jobs leave our state."
Del. Rosalyn Dance, D-Petersburg, countered that this is not the time to take away a revenue source from localities.
"In these tough times, when we are having to cut back on funds for them, we are tying their hands if we take away this tool that they have," she said.
Another Purkey bill, HB119, which would have abolished Virginia's corporate income tax, died in a House committee.
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I'm impressed.
I didn't think the General Assembly had it in them to go against the wealth oligarchy in such a manner. It was a close vote. Thank goodness the imbalance between Republicans and Democrats wasn't a little greater in the favor of the Republicans or the state would have to be coming up with another 200 million in revenue shortfall.
I love the scare tactics the Republicans use though. Well, now that we didn't cut the machinery tax you can just watch the jobs leave the state. Yeah right, what are they going to do, spend thousands of dollars to relocate. Maryland and North Carolina do not have machinery sales tax as far as I know, Maryland hasn't had it for about 10 years and the companies haven't been flocking to Maryland of North Carolina. Why, because everyone knows that Virginia is the place to do business. Low wages and low corporate income tax make up for any measley old machinery tax.
"Low wages and low corporate
"Low wages and low corporate income tax make up for any measly old machinery tax." Indeed, a competing company can cross the state line (about 15 miles away) and save thousands maybe tens of thousands of dollars on tax. This tax, like the car tax, only harms people and companies that are trying to run a business. As equipment gets dated and a company has to buy expensive new higher tech equipment to stay competitive, it might be worth the little drive to relocate across the state line. I know many people that have moved to Moyock, Hertford or other nearby areas of NC to escape VA high tax and still work in VA. Sooner or later people will understand that it's not a revenue problem, it is a spending problem. A foolish quote from the article is, "revenue that many Virginia localities depend on to fund schools, police and other services." I'm tired of hearing "fund schools, police and other services". That's a full of bull comment. Taxing more is not the way to solve the revenue problems. Spending more effectively and responsibly is the way to solve problems. It amasses me that all these taxes are created for "schools" yet it never seems to be enough. Spend smart, not more.