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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Last week, the Washington Post confirmed the obvious . . . . that drivers in Northern Virginia and the D.C. Metro area generally, have one of the worst commutes in the nation.

Washington area workers are more likely to travel to jobs outside their home counties than commuters in any other region in the nation, according to a new study.

A higher percentage of Virginia residents live and work in different counties than commuters in any other state; Marylanders ranked second, according to “Commuting in America III,” a national report on commuting patterns and trends published yesterday by the Transportation Research Board.

The Washington region is second only to New York for the percentage of workers with “extreme commutes,” which the study defined as 90 minutes or more each way. Of the 12 counties with the highest percentage of long commutes, the region had three: Prince William, Prince George’s and Montgomery.

While traffic hasn’t really emerged as a major issue in the high profile Allen Webb campaign (they’ve decided to take the low road and focus on Senator Allen’s apparent penchant for racial slurs and Jim Webb’s fondness for pedophilia) it has emerged as an issue in our local congressional campaigns and will almost certainly be the leading issue in next years state elections.

As a resident and commuter in this area for almost 10 years, I have very definite opinions on the subject, having made the commute into D.C. from the McLean/Tyson’s Corner area in nearly every way possible.

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There are too many reports of conservatives acquiescing in a 2006 Congressional defeat, perhaps escaping into their fantasy that Republicans will somehow be “punished” for straying from historic principles, and that a consequently “cleansed” party can return to power easily in 2008.

Theirs is a perilous path to follow. Jim Geraghty in National Review Online addressed this line of thought last May:

“Your effort to re-conservativize the Republican Party in Washington by staying home this year will have the effect of massacring the actual conservatives and empowering the moderates who you disdain. Perhaps we can call this counterproductive maneuver ‘RINO-plasty.’

But that’s okay, the staying-at-home-conservatives insist. The GOP will win back the House and Senate in 2008, establishing a true conservative majority.”

Geraghty explained:

“. . . [w]hat kind of lengths do you think the Democrats will go to in order to keep power once they’ve got it? Does the “Fairness Doctrine” ring a bell? You think Pelosi and Reid wouldn’t try that tactic to hinder conservative talk radio? How about McCain-Feingold 2.0, with a particular focus on controlling “unregulated speech” on the Internet and blogs?”

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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.