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Roadmap for the 21st Century: Rightsizing Government

March 9, 2017

This paper -- the tenth and final in the Roadmap series -- describes efforts to define the optimal size of government, and policies that can get us there.

10 Reasons to Oppose Virginia Sales Tax Increases

September 18, 2002

Northern and southeastern Virginians will vote in referenda this November to approve or reject increases in the retail sales tax to fund transportation projects. Northern Virginians will decide whether to increase the sales tax from 4.5 percent to 5.0 percent, an 11 percent increase. Virginians in the Hampton Roads area will decide whether to increase the sales tax from 4.5 percent to 5.5 percent, a 22 percent increase. Proponents of tax increases point to unmet transportation needs to support their cause. Yet state spending increased 13 percent in 1999, 7 percent in 2000, and 9 percent in 2001. If key transportation needs have not been met, the problem is not a lack of funds but legislators who have not properly prioritized the budget. If the sales tax referenda are passed, the state government will have a strong incentive to reduce what it would otherwise spend on transportation in northern Virginia and Hampton Roads. By some measures, northern Virginia already gets the short end of the stick with regard to the state budget. Tax increases are not just bad budget policy; they are also bad economic policy. Since higher taxes reduce economic growth, an added cost of higher sales taxes would be lower incomes for Virginians. During the 1990s Virginia taxes grew faster than incomes, and local property taxes have soared recently. Even modest restraint in nontransportation spending could save enough money to fund priority highway projects without tax increases. Further, the state could adopt a spending growth cap that channels excess future tax revenues to transportation needs and tax cuts.

The Failed Critique of Personal Accounts

October 8, 2001

Even though President Bush's Commission to Strengthen Social Security has yet to produce a specific proposal to establish a personal account option for Social Security, opponents of the idea have already put forward a barrage of objections and criticisms. Those criticisms generally reflect fundamental misconceptions of and confusion about Social Security's current problems. Social Security is facing a financial crisis as early as 2016. The Social Security Trust Fund will not delay the onset of Social Security's problems. The critics are equally mistaken about individual accounts. Individual accounts do not involve simply switching investments from bonds to stocks. There would be no reduction in survivors' or disability benefits. Although the mix of benefits would change, workers would have higher, not lower, overall benefits under individual accounts. Finally, benefits under the current system are not guaranteed, but workers would have a property right to the funds in their individual accounts.