Taxpayer Watchdogs Slam State Tax-Hike Plans

By Susan Jones | July 7, 2008 | 8:21 PM EDT

( - While the Bush administration lowers taxes, some states want to raise them.

One taxpayer watchdog group is criticizing Virginia Gov. Mark Warner, a Democrat, for his proposed billion-dollar tax hike, while another group is urging Arkansas lawmakers to reject any proposed tax increases

The National Taxpayers Union called Virginia Gov. Warner's proposal "as unwise as it is unneeded" and promised to work for its defeat.

NTU President John Berthoud said Gov. Warner's proposed tax hike flouts the will of Virginia voters, who defeated tax-hike measures 14 months ago - in the November 2002 election.

"Despite a multimillion-dollar campaign in favor of his 2002 tax hike scheme, voters overwhelmingly turned aside Mr. Warner's pleas to send Richmond more of their money," Berthoud said in a press release. So why should voters go for a billion-dollar tax hike now, he wondered.

According to Berthoud, Gov. Warner justifies his record tax hike by claiming that many programs are under-funded, but the fact is that spending for most programs in recent years has greatly exceeded the growth in population and inflation.

Berthoud noted that Virginia's economy -- like that of the entire nation - is just emerging from a slowdown, and he said raising taxes at this time could stop the recovery in its tracks. "Governor Warner's giant tax hike jeopardizes the state's economy for the coming decade," he said.

According to the Cato Institute, a public policy research group with a libertarian bent, Gov. Warner wants to raise the top income tax rate, cut taxes for people with modest incomes, increase corporate taxes, raise the general sales tax, cut the sales tax on food and hike cigarette taxes.

According to a Cato Institute study, "The governor put so many moving parts into his package that people will have a tough time figuring out whether their taxes would go up or down."

The National Taxpayers Union, which backs lower taxes, less wasteful spending, and more accountable government, planned to announce its opposition to Gov. Warner's tax hike plan at a press conference in Richmond on Tuesday. The group says it has more than 8,500 members in Virginia.

Arkansas mulls tax hikes

Arkansas, ordered by the state Supreme Court to restructure education funding, is also mulling tax hikes to get the job done.

But the Council for Citizens Against Government Waste (CCAGW) says tax hikes are the wrong way to satisfy the Supreme Court order.

"Whenever politicians are faced with a budget shortfall, they turn to tax increases as the easiest solution," CCAGW President Tom Schatz said in a press release.

"But taking more money out of the pockets of Arkansans will not solve the state's education needs. The root problems must first be identified and recommendations mapped out before more money is invested. Otherwise, hard-earned tax dollars will simply go to waste."

According to CCAGW, the U.S. Department of Education is a good example of how more spending is the wrong solution: Between 1996 and 2003, federal education spending increased by 132 percent - but since 1996, 12th grade science scores have declined and reading and math remain virtually unchanged, CCAGW noted.

"Instead of raising taxes, other methods of complying with the [Arkansas] Supreme Court ruling should be examined," Schatz said. "There is plenty of waste in state and local governments that could be identified and eliminated so that taxpayers are not faced with an extra burden."

CCAGW urged Gov. Mike Huckabee, a Republican, to set up a commission that would identify waste, fraud, and abuse, and then join with taxpayers to demand that the Legislature enact the commission's recommendations.

"Identifying waste can not only help Arkansans solve the education crisis, it can also save taxpayers money for years to come," Schatz concluded.

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, which describes itself as dedicated to eliminating waste, fraud, abuse, and mismanagement in government.