Cato Daily Dispatch for September 30, 2002
Subscribe to the Daily Dispatch via email
Subscribe to the Daily Dispatch via PDA (AvantGo)
(Links to outside sources were active as of the date of this dispatch; however, not all news sources maintain links to current stories indefinitely. Some links also may require registration.)
Northern Virginia Tax Referendum Debate Heats UpIMF, World Bank Wrap Up Talks
Townsend Supporter Skirts Maryland Campaign Finance Limits
Northern Virginia Tax Referendum Debate Heats Up
Northern Virginia's sales tax referendum isn't just about taxes anymore, according to The Washington Post.
What looked like an up-or-down vote on raising the sales tax rate to fund transportation projects has blossomed into a policy extravaganza as sprawling as the region itself. Courting 900,000 votes, proponents and opponents are engaging suburbanites in a discourse about complex highway funding formulas, the science of smog and the role of wealthy developers -- and, by the way, taxes, too.
Both sides have ratcheted up the tax debate with near-apocalyptic rhetoric, agreeing that Northern Virginia's very identity -- its "quality of life" -- is at stake in the Nov. 5 election.
Chris Edwards, director of fiscal policy studies at the Cato Institute, and Peter Ferrara, president of the Virginia Club for Growth, argue against the Virginia sales tax hike in the recent Cato briefing paper, "10 Reasons to Oppose Virginia Sales Tax Increases."
They write that tax increases are bad budget policy and 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."
They go on to say, "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."
IMF, World Bank Wrap Up Talks
Wealthy countries should move more quickly in tearing down trade barriers with poor nations, the leaders of the International Monetary Fund and the World Bank said yesterday, The Associated Press reports.
That course is one of the best ways to narrow huge inequalities in income around the globe, said IMF Managing Director Horst Koehler and World Bank President James Wolfensohn.
They said the world is in the midst of a difficult period with stock market turmoil in rich countries and concerns about war in Iraq threatening to derail the fledgling recovery from last year's recession.
The Cato Handbook for Congress calls for the withdrawal of the United States from the IMF because it "does not appear to have helped countries either to achieve self-sustaining growth or to implement market reforms." In the Cato book, "Perpetuating Poverty: The World Bank, the IMF, and the Developing World," editors Doug Bandow and Ian Vasquez analyze the moral hazard created by these institutions when they make poor countries dependent on Western bailouts.
Townsend Supporter Skirts Maryland Campaign Finance Limits
The Washington Post reports that Florida lawyer Kathleen L. Crotty was so eager to support Kathleen Kennedy Townsend's bid to become Maryland's next governor, she flew to Washington in May to attend a $1,000-a-person fundraiser at the home of Sen. Edward M. Kennedy (D-Mass.), Townsend's uncle.
But when she arrived at the senator's stately mansion, Crotty feared she would be unable to donate, having already given Townsend $4,000, the maximum that Maryland campaign finance laws allow. So on the advice of Townsend's campaign staff, she instead wrote her check to a special fund within the Maryland Democratic Party.
"To be honest, I find the election laws about as easy to solve as Rubik's Cube," she said later. "I knew I might be close to the limit, so I didn't want to take any chances."
Crotty skirted Maryland's strict campaign finance limits by donating to the Democratic Party's administrative account, which can accept unlimited contributions and has recently emerged as the new home to Maryland's version of soft money.
In "Townsend Learned Her Political Tricks from Glendening," Executive Vice President David Boaz writes that Townsend and Maryland Gov. Parris N. Glendening are "the perfect modern politicians. Like Lord Bolingbroke, their goals are to get elected and reelected, to hire their friends, to use tax dollars for political activities, and to hand out tax dollars to those who helped them win. The principal spring of their actions is money and power.
Wyatt Dubois, editor, wdubois@cato.org