Anti-Tax Sentiment Echoed by Bipartisan House Vote to Repeal Death Tax

Va. Anti-Tax Groups Make Voices Heard
Capitol Protest Comes a Day After Rally in Favor of Proposed Increases

By Chris L. Jenkins and Michael D. Shear
Washington Post Staff Writers
Wednesday, February 11, 2004; Page B04


RICHMOND, Feb. 10 -- Opponents of plans to raise taxes staged a rally at the state Capitol on Tuesday, promising that lawmakers who support tax increases this year will face the consequences when they seek reelection.

The gathering, which drew about 100 members of several anti-tax groups, was smaller than a rally staged at the same spot Monday, when groups backing the tax plans attracted more than 700 people.

But those who put together Tuesday's rally said they believe there are many more people across the commonwealth who oppose the plans offered by Gov. Mark R. Warner (D) and Senate Finance Committee Chairman John H. Chichester (R-Stafford).

James T. Parmelee, president of Republicans United for Tax Relief, said at the rally that those people will be heard from once they realize that tax increases might happen.

"No one believes that a Republican-dominated legislature would pass a tax increase," he said. "But once they realize it could happen, you'll see an outcry."

Republicans control both chambers of Virginia's legislature. But GOP leaders in the Senate, who support some tax increases, are at odds with the state party, which has condemned Warner's plan and criticized Chichester's proposed increases.

Two senior Republican senators have requested a meeting with the party's central committee to address that philosophical divide, one of the senators said. The party has scheduled a special meeting for Tuesday.

"We think it's important for the central committee to understand from our perspective what our districts are going through," said Sen. Kenneth W. Stolle (Virginia Beach), who has signed on as a co-patron of Chichester's plan. He will be joined by Sen. Thomas K. Norment Jr. (James City). "We want to be clear about why we think there are certain programs, like Medicaid and pubic safety, that are in jeopardy."

The House of Delegates, where the Warner and Chichester tax plans were rejected in committee votes last week, passed a bill Tuesday that would eliminate the tax on estates by a vote of 69 to 29.

At least 30 other states have repealed or are about to repeal estate taxes, and supporters in Virginia say that if the state doesn't follow suit, families and businesses could relocate.

"It's poor public policy to have the death of a loved one serving as the triggering event for government to tax a family," said Del. Stephen C. Shannon (D-Fairfax).

Other Democrats said the bill, which would affect fewer than 1,300 filers and cost the state $108 million a year in lost revenue, was a giveaway for millionaires.

The bill, HB 4, would not take effect until January 2005, but some GOP lawmakers nevertheless voted against the measure, citing the state's estimated $1 billion budget shortfall.

Warner last year vetoed a similar bill, and his spokeswoman Ellen Qualls indicated that he could do so again if estate tax cuts aren't part of an overhaul of the tax system. "It's making a promise that they don't have any way to pay for," Qualls said.

The case for tax increases received a friendly reception Tuesday in Chichester's committee.

Chichester has proposed the Virginia Investment Act, which would raise income taxes, sales taxes, gas taxes and fees while eliminating the car tax and fueling increased state spending on colleges, health care, prisons and schools.

"I want to honor the commitments we've already made in tax relief and improve fairness in the tax code," Chichester told his colleagues, most of whom are co-patrons of his tax bill, SB 635.

Chichester said a key part of his plan would end the car tax, as proposed by former governor James S. Gilmore III (R). Under the senator's plan, car owners would pay no tax on the first $20,000 of the value of any car by next year.

"We either need to finish the car-tax relief as we promised or admit we can't do it and move on," Chichester said, likening the unfinished tax cut to a stepstool in a darkened room. "You are going to trip over it every time, so it's time get rid of it and move on."

Chichester invited about a dozen business leaders and others to testify on behalf of his bill.

Heywood Fralin, a Roanoke nursing home executive, told senators that business leaders support efforts to raise taxes to pay for increased college and health care spending.

"The pressure will be great to compromise and not fully address the problem," Fralin said.

Warner's finance secretary, John Bennett, presented the governor's plan, which would raise taxes on upper-income workers, increase the sales tax by 1 cent and tighten laws on corporate taxes. It would also phase out the car tax and lower taxes on groceries.

"We've got to stop zigging and zagging from budget to budget," Bennett said. "There are people saying you can cut your way out of it, but I don't think that's so."

The activists who gathered outside the Capitol disagree with Bennett and Chichester. Holding up signs that read "Remove John CHITAXER" and "No More Taxes," they said the growth in the state's economy will provide more than enough money for the state to operate. As part of their plea, they handed out thousands of teabags -- meant to remind people of the Boston Tea Party -- with labels that urged lawmakers to resist the Warner and Chichester plans.

"We have people in the [Virginia] Senate who are confused about whether they are Democrat or Republican," said Peter Ferrara, president of the Virginia Club For Growth, referring to Republicans who have been friendly to the tax plans offered by Warner and Chichester. "You cannot run on the mantle of Ronald Reagan with the policies of Jimmy Carter."

Staff writer Jo Becker contributed to this report.



2004 The Washington Post Company