10 December 2012

Dear Legislator,

I write you today to express ATR’s opposition to any proposal to index the gas tax to inflation because simply, this proposal is a job-killing tax increase. For those members of the Virginia Legislature who have signed the Taxpayer Protection Pledge, voting to index the gas tax to inflation, without any complete offsets, would be in clear violation of the promise you made to your constituents and the people of Virginia to oppose any and all efforts to increase taxes. By indexing the gas tax to inflation, it would create a new fuel tax regime, which would raise taxes on countless Virginia families and businesses, as well as put future tax increases on autopilot. Higher fuel costs mean higher costs for businesses that rely on product shipping. These higher costs will be passed on to manufacturers and consumers alike – not just borne by the shipping industry. Some of Virginia’s largest international exporters – the automobile industry, machinery and aircraft manufacturers, and plastics – would be adversely affected by higher taxes on fuel. Increasing the gas tax by indexing it to inflation is a bad business practice for Virginia. The transportation woes Virginia faces are not because of the gas tax. Richmond has spent too much money; in other words, it’s a spending problem not a revenue problem. If spending had been capped at the rate of inflation and population growth, Virginia would have spent $21.6 billion less between 1999 and 2009, saving more than enough to address Virginia’s transportation needs. Proponents of the proposal have claimed that indexing the tax to inflation is common policy in Virginia. However, no other major tax in the state is indexed to inflation. They also argued that this tax is needed to pay for the construction of roads. However, according to an annual study conducted by the Reason Foundation, states that have indexed their gas tax to inflation have the worst roads in the country. Taxpayers would be paying higher tax rates each year and would not receive better roads. For those in Richmond who have signed the Taxpayer Protection Pledge, I would remind you again that this is a clear violation of the commitment you made to your constituents. If you have any questions, please contact ATR’s state affairs manager Will Upton at 202-785-0266 or wupton@atr.org.

Grover G. Norquist

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