Move over Grover: Republican Norquist, the new poster boy for the Governor’s High Tax Liquor Plan

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    ( – promoted by lowkell)

    By Paul Goldman

    The latest High Tax Republican to swallow the 200% moonshine behind the Governor’s High Tax Liquor Plan is Grover Norquist, allegedly the anti-tax guru of the GOP, raising the question of whether he has some side deal with the Big Liquor boys like one of the characters in the new HBO hit series Boardwalk Empire. The new Move Over Grover to the pro-tax side claims that he has studied the Governor’s High Tax Plan and finds that it doesn’t raise taxes at all.

    He is an anti-tax GOP guru?

    I read where GOP Senate Candidate Christine O’Donnell doesn’t believe in evolution. That’s nothing compared to Governor McDonnell and Guru Norquist: they don’t believe in mathematics.

    Let me explain the ABC’s of McDonnell-Norquist  ABC tax plan.

    Right now, the state’s net revenue from the ABC system comes (1) from current taxes which are admitted to be taxes and from current “fees” which previously Mr. Norquist and Delegate McDonnell considered taxes by another name.and (2) the net profit from the ABC business. So let’s call the taxes/taxes disguised as fees A and the net profit B. Thus, A + B = the amount the ABC hard liquor business provides to the state. Let’s call this amount C..

    Recapping: A + B = C. Got it Grover baby?

    Now, under the McDonnell ABC plan, the Governor has pledged to make sure the state continues to receive C, this is known as revenue neutrality.

    Also under the McDonnell plan, the state will no longer receive B, which is the profit from the liquor businesses he wants to sell to private enterprise.

    Got it Grover Baby?

    Now, unless you are one of the witches Ms. O’Donnell use to hang out with or the budget director for “Deficit” Jim Gilmore, this means Governor McDonnell has to do the following:

    He needs to figure out how to replace B with a NewB since the tax revenue from A according to the Governor and Mr. Norquist remains the same the only difference being the mix of taxes and taxes disguised as fees now being collected for the state by clerk’s in a private liquor store. ..

    Unfortunately, there is only one way for their plan to have the old B equal the NewB, since the profit is no longer going to the state: namely, the McDonnell-Norquist plan has to impose new taxes and taxes disguised as fees to make up for the revenue shortfall so that A + NewB = C to achieve revenue neutrality.

    Again, this is the only way for the state to achieve revenue neutrality unless McDonnell and Norquist want to claim that there will be such a huge increase in consumption that the old taxes will produce not only A but also an amount equal to the previous profit.

    But McDonnell and Norquist say there will be no increase in alcohol consumption.

    So let’s do the math. Current alcohol sales in Virginia produce A in taxes and taxes disguised as fees. The only other sources of new such annual revenue is the Governor’s claim that folks in NOVA who now buy booze in DC or Maryland will instead get theirs in Virginia, state business taxes to be paid by these new liquor businesses, or savings in terms of costs the state no longer incurs by privatizing the system. Call this X.  Remember, the one-time “windfall” from those buying these unprecedented in America hugely expensive special liquor licenses goes to transportation only.

    But even Governor McDonnell doesn’t claim that – X – equals the old profit produced by the old ABC system.

    SO: NewB-X is the missing piece, the shortfall from no longer getting the profit.

    THUS: How does the McDonnell High Tax Plan cover this shortfall in order to achieve revenue neutrality?

    Easy as TAX: It raises taxes and taxes disguised as fees high enough so the additional new tax revenue and tax revenue disguised as fees equals the shortfall. How many tens of millions in new taxes and taxes disguised as fees is this? Quite a lot.  

    That’s the basic math.

    Instead, the Governor and Mr. Norquist would have you swallow 200% moonshine.  

    • robsmithiii

      Having looked at the study released by the UofR economist today, I’m baffled that McDonnell & Co. had sharp words against the distributors/wholesalers/middlemen.  One look at VPAP tells us that Bob should be kissing their feet.

      But there’s always some method to the madness.  I think that Governor McDonnell made a campaign promise to privatize without putting out deep enough feasibility feelers — and that starts to reveal a pattern in McDonnell’s style: recklessness/carelessness.  The “Happy Confederate Month” fiasco; lack of control of Cuccinelli; chumming up to the Tea Party instead of being wary…  I think Bob tends to bite off more than he can chew…and I think his woes are far from over with policy backfiring.

      And no, I don’t think privatization will pass in its current format.