Virginia Governor Bob McDonnell (R) was on Fox News today to discuss his new plan to shift the cost of highway construction from drivers to the poor, which he will accomplish by eliminating his state’s gas tax and replacing it with an expanded and increased sales tax. McDonnell called the idea a “new, innovative” way for his state to address its transportation shortfall:
Some have suggested that is why the gasoline tax is good, because people buy less gas and then the air is clean. That’s not the policy reason. You tax things to raise revenue to provide government services, and so that’s is the purpose of it, not to create those kinds of policies. But Neil, the whole goal here is to create a way to have a sustainable method of funding our roads and bridges and other transportation assets for the future so we can create more jobs, so that businesses will come and locate here, so entrepreneurs will start up here, so families can spend more time with their children, parents. That is the whole goal and do it in a way consistent with conservative principles. Look, it’s a different idea. We shouldn’t be afraid of new innovative ideas.
McDonnell’s plan will result in the cost of highways being borne by low-income Virginians — as the sales tax disproportionately affects those at the bottom of the income scale who are more likely to spend all or most of their income — and by those who use mass transit, walk or bike. It lets out-of-state drivers who use Virginia’s roads off without paying a single cent. As the Washington Post’s Robert McCartney wrote, “the gas tax is a nearly ideal way to fund highways. It’s borne by the people who use highways. It penalizes fossil fuel use and thus is environmentally friendly. Out-of-state drivers, rather than Virginians, pay a sizable chunk of it.”
Virginia already has a regressive tax system, with the richest 1 percent paying a 5.2 percent effective tax rate, while the poorest Virginians (those making less than $19,000) pay 8.8 percent, according to the Institute on Taxation and Economic Policy. Increasing the sales tax is only going to make that disparity worse, while making those who don’t use the state’s highways pay more for their upkeep.