Professor Donald Boudreaux, Chairman of the Economics Department at George Mason University, suggests that Virginia policymakers should be working to cut taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es 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 recessionA recession is a significant and sustained decline in the economy. Typically, a recession lasts longer than six months, but recovery from a recession can take a few years. 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?Share