The 2004 Virginia tax increase would have been small potatoes for Virginia taxpayers if Virginia had enacted a Taxpayer Bill of Rights (TABOR) in the early 1990s. TABOR limits the growth of government revenues to population plus inflation, and requires revenues in excess to be returned to taxpayers. The people, through a referendum process, can allow the government to keep and spend excess revenues if they so desire. According to Michael New and Stephen Slivinski, writing for the Virginia Institute for Public Policy in The Case for a Taxpayer’s Bill of Rights in Virginia (PDF), Virginia taxpayers would have received a tax rebate every year from 1995 to 2002, for a total of $11.7 billion. State spending still would have increased by approximately $2 billion in ten years, but the taxpayers would have reaped most of the tax windfall from economic growth. As Virginia taxpayers notice that their state government has a $1.1 billion surplus on the heels of a $1 billion tax increase, perhaps TABOR will start to make more sense.
