Tuesday, September 28, 2010

Norquist Says McDonnell's ABC Privitization Plan Does Not Include a Tax Hike.

In a letter released by Americans for Tax Reform, President Grover Norquist defended the McDonnell plan to privatize Virginia's ABC stores, and said that after looking at the data he has concluded that the plan does not impose a net tax increase and a vote for the current plan would not be a violation of the Taxpayer Protection Pledge.

In the letter Norquist said:
Though this plan is not a net tax increase in its current form, there is room for improvement. Particularly, one major flaw in the proposal is the onerous tax rate of $17.50 per gallon that is set for distilled spirits. Under the current proposal, the tax rate would be above the national average, and the highest of any state surrounding Virginia. We urge Governor McDonnell and the legislature to reduce the spirits rate to a reasonable level that is regionally competitive.
ATR fully supports privatization of ABC and other entities. Privatization encourages competition and the ability to create wealth in the private sector. Furthermore, there is no good reason why the state should be in the liquor business. Eliminating this government monopoly is a step in the right direction and a victory for free enterprise. If you have any questions, please contact Nathan Pick, state affairs manager, at 202.785.0266.


Rob Smith III said...

The per gallon, the excise tax and the tax for direct purchase of spirits are all starkly negative aspects of this venture into privatization. Get rid of those and forget bridging the gap in net revenue loss from the sale, which is what McDonnell is fearfully trying to avoid (and what he arguably did not foresee during his campaign when he made his promise). The starting bid price is arguably fair game but I'd suggest a steeply discounted rate only for small businesses in Virginia and then selling the rest to the highest bidder with the quoted opening bids. He should take the punch and do a favor for small businesses.

Virginia Gentleman said...

Thanks for the comment. I tend to agree with you. If privatization causes some loss in revenue so what. If need be we can make up for it by cutting some spending in other areas.