Part 1 on the clamor to raise taxes or “the kids will go unschooled” in Northern Virginia is here.

The following from the New York Times is about as concise as it gets on why it is so hard to combat spending:

But selling spending reductions may not be as easy as selling tax cuts, which first ignited the conservative grass roots. “It is the problem of concentrated benefits and diffused costs,” Mr. [Morton] Blackwell said. “For the people who want a spending program, it is the most important thing in their lives. They want and need that spending. They will work day and night to get that spending. But the cost is so diffuse it is hard to find people who have similar opposition to it.”

One problem with an economic boom is that tax receipts generally rise and give governments an excuse to indulge in wild new spending programs that cannot be sustained when the boom ends. That, apparently, is now the situation facing Northern Virginia:

Local governments across the region are considering cutting spending or raising taxes in the coming year because of a decline in revenue growth caused by the housing downturn…

The difficulty in Northern Virginia is that after six years of double-digit increases in home values, officials are predicting little or no growth for the coming year. Tax revenue could creep slightly upward, but the increases are nowhere near the whopping totals of recent years, officials said.

Local governments in Virginia by law cannot run budget deficits, so to balance their budgets for the fiscal year that begins July 1, officials must make up millions of dollars in shortfalls by cutting spending or raising taxes.

The answer then is rather obvious — cut spending. Unfortunately, politicians running the governments usually pull out the “for the children” mantra. Having spent like drunken sailors on a shore leave during the boom years, now the school walls will crumble, the poor children will go hungry, books will be burnt to keep libraries warm unless the tax payers fork over more money. We all heard the sob stories.

Arlington officials want to cover the shortfall without raising the property tax rate, according to Mark Schwartz, the county’s director of management and finance. “We will not present a budget that says: ‘Here’s a gap. Let’s increase taxes to fill it,’ ” Schwartz said. [Snip]

Vice Mayor (of Alexandria) Andrew H. Macdonald (D) said of bridging the shortfall, “we can do that either by finding some more efficient way in making cuts or find a new source of revenue by slightly raising the tax rate. . . . My view is that we may have to change the tax rate slightly.” [Bold face mine.]

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Democrats smell the control of Congress in a few weeks, and in anticipation, Nancy Pelosi is proposing a tax hike for those who earn high income (h/t Richardson at TKL):

To do that, she said, Bush-era tax cuts would have to be rolled back for those above “a certain level.” She mentioned annual incomes of $250,000 or $300,000 a year and higher, and said tax rates for those individuals might revert to those of the Clinton era…

“We believe in the marketplace,” Pelosi said of Democrats, then drew a contrast with Republicans. “They have only rewarded wealth, not work.”

Pure, utter demagoguery! Low income taxes do not reward wealth. On the contrary, they reward those who work to build wealth. Let me reproduce what I wrote earlier in response to a similar Kerry-Edwards proposed tax hike:

Read Richard Rahn’s analysis of why, under the Kerry-Edwards tax plan, billionaires like Kerry and Teresa Heinz will pay a measly 15% or so of income tax while young doctors or professionals with no assets and high debts will pay over twice the “Kerry rate” in income tax — all in the name of taxing the rich.

According to Rahn, Kerry’s plan to increase taxes on those whose wage income exceeds $200,000 a year is NOT a taxation on the wealthy — it is taxation on those trying to become wealthy. In other words, under Kerry’s plan, those who are already wealthy like Kerry and Teresa Heinz will continue to be able to shield much of their income from income taxes. However, young professionals with no assets and high debts (I know a young doctor who has over $100,000 in debt from college, medical school and residency) will be taxed at the highest rate even though they just started making over $200,000 a year.

So despite the claim of egalitarianism, the Kerry-Edwards tax plan actually diminishes the upward mobility of our economic system by making it more difficult for those who attempt to cross over to the upper class from the lower/middle class by working hard, going to good schools and earning high income.

That’s the Kerry-Edwards tax plan for you, shielding the truly rich while bleeding the middle class and all the while claiming to be “for the middle class and the poor.”

I note that Pelosi herself is one of the “already rich” (her family is worth over $25 million). It wouldn’t bother her one bit that young professionals and small business owners, with little pre-existing net worth, will be prevented from building wealth, all because of her mechanism of high income taxes. She is already super wealthy, and her wealth won’t be subject much to taxes on wages. In fact, it is her proposed tax hike that will reward wealth and punish work.

Last July 17, in one of the House of Representatives leadership’s less prescient moments, that body approved arguably the largest earmark of modern times — $1.5 billion to the management-challenged Metro transit system. This stand-alone package (HR 3496) authored by Representative Tom Davis and supported by Representative Frank Wolf, two Virginia Republicans, has a special gift for the unwary taxpayer. In Heritage’s Ron Utt’s words:

As troubling as this inequitable transfer would be, Mr. Davis’s proposal also requires that, as a condition of Metro receiving the $1.5 billion federal bailout, all communities in its service area establish a “dedicated funding source” (a euphemism for a tax increase) to match the federal subsidy.

The danger is that this succubus could be attached to a genuinely urgent Senate vehicle and slide through to the president’s desk where veto pens may still be on order, if not under construction. Mr. Davis has no shame about standing behind this measure, and, consistently, voted for greater transparency on earmarks last Thursday. Mr. Wolf, on the other hand, appparently believes that the less sunshine the better on such dark matters and voted the other way on sunshine.

Some old-line Virginia Republicans, even if not entirely comfortable with these raids on the U. S. Treasury in behalf of local outstretched hands, nonetheless object to such public scrutiny of Republican spending during an election year. What they entirely miss is that this kind of egregious spending jeopardizes the House Republican majority nationally even if such Congressional largesse may go down relatively smoothly in northern Virginia.

From Leesburg Today:

Loudoun County lost its only seat on the Commonwealth Transportation Board after Gov. Timothy Kaine (D) replaced Leesburg attorney Robert Sevila with E. Dana Dickens III, of Suffolk, as one of two at-large urban representatives on the board.

 

In addition, Kaine appointed Fauquier resident Peter B. Schwartz, who is a member of the Piedmont Environmental Council’s board of directors, as the at-large rural representative to the CTB, replacing Hunter R. Watson, of Farmville.

 

Schwartz represents the second appointment by Kaine of PEC-affiliated campaign contributors to state-level positions. [Snip]

 

Schwartz, who ran unsuccessfully to unseat Del. Clifford “Clay” Athey Jr. (R-18) in 2001, contributed nearly $50,000 to Kaine’s lieutenant governor and gubernatorial campaigns and inaugurations from 2001 to 2006.

Call it a convergence of political cronyism and anti-growth ideology. I guess the idea is to preserve Western Loudoun county as an artificial “nature preserve” for the super affluent at taxpayers’ expense.

In the mean time, the growing middle class exurbs in Eastern Loudoun will subsidize the rest of the state while the county’s own ballooning transportation needs go unmet by Richmond.