Out of Control Policy Blog

Death Tax, ABC Stores Should Be in Virginia's Crosshairs

Over at Bacon's Rebellion today, Thomas Jefferson Institute president Mike Thompson writes that it's time to kill Virginia's death tax and sell the VABC stores (for those who haven't had the displeasure of becoming familiar with that acronym, that's the Virginia Department of Alcoholic Beverage Control):

Every time the death tax has been reduced nationally and at the state level, tax revenue has increased and additional employment has been generated. What this new study shows is that wiping out the death tax once and for all will create over 1.5 million jobs in the United States and, consequently, about 39,000 jobs here in Virginia. These jobs will be created at no cost to the government - and in this writer’s opinion - most likely with an increase in overall tax revenue. This makes more sense than the current policy of throwing some $800 billion at the economy in order to “save” 3-4 million jobs. There is great difficulty for economists to measure “jobs saved” and it would be much easier to connect the estate tax elimination to actual job creation. These studies have been done accurately with earlier death tax reductions. Job creation is the key to economic recovery, and 39,000 new Virginia jobs would also create hundreds of millions of dollars in new income taxes, sales taxes and property taxes.

The second action is for the state to privatize the ABC stores and take the money generated from the initial auction and pour it into our deteriorating road network. Arguably, the Commonwealth should never have been in the liquor store business and today there are only 18 states that control liquor sales as we do. Taking a government run business private almost always creates a positive economic benefit, but it has to be done carefully and it has to be done wisely. Shedding this enterprise to generate a large upfront cash payment will reduce state operational costs, should generate at least the same annual revenue and broaden consumer choice. This is fundamentally good public policy.

Full article here. Also see my July post on why privatizing VABC's retail monopoly to fund transportation infrastructure makes sense.

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Leonard Gilroy is Director of Government Reform


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