August 24, 2009
Professor Donald Boudreaux, Chairman of the Economics Department at George Mason University, suggests that Virginia policymakers should be working to cut taxes right now, not raise them:
Richmond's fiscal year 2008 general-fund revenues were up by 1.3 percent over 2007, exceeding the official forecast by nearly $16 million. But projections for fiscal year 2009 are indeed for those revenues to come in lower by about 5 percent.
Projections for fiscal 2010, however, are for those revenues to nearly completely recover to their 2008 levels.[...]
By signaling to entrepreneurs and investors that the government is economically tone-deaf -- by revealing the government to be desperate to maintain its revenue stream even when many of the rest of us must struggle with reduced incomes -- raising taxes during a recession tells the world that the tax-addicted government is especially unfriendly to markets.[...]
Does anyone seriously believe that the influence of special-interest groups -- those gluttonous, hydra-headed creatures that thrive and multiply in the hothouse of politics -- is so small that citizens throughout the Old Dominion would suffer real hardship if government cut its budget for a year or two by, say, 10 percent?