The Tax Policy Ghost Of 1812
By Greg L | 1 March 2007 | Local Economy, Virginia Politics | 8 Comments
While the recent news of Virginia earning the number eight spot in a ranking of states adapting to the “new economy” is going to give Virginia politicans something to crow about, buried within the rankings is a troubling statistic: that Virginia is the fourth-worst state in terms of entrepreneurs as a percentage of the population. This dynamic segment of the economy is where a huge proportion of the new ideas and new business models are developed, and is the cradle from which an huge chunk of the nations wealth is initially developed. Without entrepreneurs, much innovation and creativity languishes.
While government policy can’t create entrepreneurs, it sure can stifle them. One instance of bad public policy which can do harm is the Business Professional and Occupational License (BPOL) tax that’s imposed on entrepreneurs by Virginia localities. It was enacted in order to offset public expenditures by these localities incurred during the War Of 1812, and like many “temporary revenue enhancements” has lived on into near immortality. This confusing law and the local ordinances which determine tax rates and revenues subject to this tax make complying with this law nearly as cumbersome as the requirement to actually pay the tax. The effect is to discourage the development of small businesses.
Several legislators in Virgina have been attempting to address this problem, including Delegate Jeff Frederick who attempted to drive a stake into the heart of this zombie by introducing HB2443. It was left in House Finance Subcommittee #1 and never made it to a floor vote in the house. With the difficulties localities face this year with declining real estate assessments, I can understand that there’s some reluctance to remove a revenue stream from local governments. But I’m sure there will be an equally valid reason to keep recovering the costs of a war that ended one hundred and ninety-three years ago whenever we might consider abolishing this tax, so arguments like this don’t impress me all that much. To the same degree it will be difficult to decrease the revenues to localities that they recieve under this tax, it will be beneficial to those saddled with paying it and help drive economic growth, anyways.
We need to help ensure the economic competitiveness of Virginia and stop throttling entrepreneurs with the Tax Of The War Of 1812. Delegate Jeff Frederick “gets it”. We need to ensure that our other legislators “get it” as well.
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8 Comments
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Greg-
I hate to keep harping on the same old thing, but I’m sure the illegal aliens have something to do with this situation also. When uneducated, illegal, poor people locate to an area the population goes up but the chance of entrepreneurs starting a new business goes down.
Just one more negative thing people should think about.
Virginia Localities Still Taxing To Pay For The War Of 1812…
……
Indeed. The crime they bring is not good for fostering business. My better half has been nearly sexually assaulted on numerous occasions, once in the middle of Dulles Town Center, by illegal immigrants when I wasn’t around. A lot of what we are getting from south of the border is the trash of these countries, not the hard-working, decent people that they’re all made out to be by their defenders. That surely cannot be good for business as well.
Getting back to BPOL, George Allen tried to get rid of this monstrosity back in 1995 when he was Governor. The Democrats, who controlled the General Assembly at the time, screamed bloody murder and accused Allen of being against school funding (sound familiar?). Sadly, the Democrats won the ensuing 1995 legislative elections (albeit barely) and BPOL has survived to this day.
What is an ‘immigrant’? One who migrates into a country. What is an ‘alien’? Of another country; foreign; different in nature; estranged; a non-naturialized foreigner.
What is ‘illegal’? Contrary to law.
The migration of illegal ‘aliens’ has much to do with the state of Virginia’s economy and those tracking this important issue must continue to bring the ‘facts’ to the political leaders, business community and your neighborhoods. How to do this? Look at Herndon’s model.
The Federal Income Tax, that causes such great
gnashing of teeth every April 15th, began as a way to
pay for World War I. (What will pay for Iraq - a blog tax?)
Yes, these temp taxes seem to last long after the orginal
stated purpose has passed.
But please note:
- Government cost money - schools,roads, police, fire
and rescue service, etc - require funding. Citizens in
a free open society often disagree about amounts,
but some reasonable support must be provided.
- Fourty states have a higher state and local tax
burden than Virginia (Virgina Business -March 2007).
Are we perfect, no — can we do better, yes — but,
compared to other states, we get a fairly good bang for
the buck.
- #1 Best state for doing business. (Forbes)
- #1 Best place for children to succeed from
childhood to adult. (Education Week)
-#2 Best state for starting new companies (Entreprenur)
- And the list of high rankings goes on.
- It upsets me when people like Jeff Frederick
want to damage this for short term political gain by
grandstanding. He knows BPOL is a local tax - not state-
so he can abolish it with no skin off his nose - while also
joining other GA clowns by increasing unfunded mandates
on local government. His goal is to defund and
over burden every community in Virginia.
- Like the no tax pledge? How about a no
unfunded mandate pledge? And a I won’t mess with
local revenue pledge? Citizens elect city councils
and county boards - that is the place to deal with BPOL.
-
There are many reasons to support the elimination of BPOL which was sponsored by Del. Frederick however Del. Miller made an attempt at reforming it by raising the threshold from $100k in annual gross sales to $1 million. Running into opposition from the Retail Merchants Association, Del Miller and Supervisor Nohe have both publicly stated that they intend to meet with George Peyton from RMA to divise a reform bill that everyone can live with in 2008.
Http://www.retailmerchants.com/_newsletters/retail-advocate-2007-01-26.htm#bpol
It is very clear that Del Miller and Supervisor Nohe have a different approach to BPOL than Del Frederick who is more closely aligned with RMA’s position.
One major defect in BPOL is a lack of enforcement. The perception is that it is a voluntary tax. Honest business owners pay it, others seem to ignore and pretend it doesn’t exist, while some pay only what they want because there is no accountability. All these hard working illegals and immigrants who paint and remodel our homes, landscape our yards, build our decks, sell us carpet and wood for our floors and manicure our nails, do you really think they’re paying BPOL?
[…] supposed to end with the war, but has instead survived it by nearly 200 years (the BPOL tax: see Black Velvet Bruce Li and Rappahannock Red to see what I […]