The Business of Taxes
Tuesday, February 17, 2004; Page A10
House Republicans introduced a tax plan Friday to help balance the state budget, and it won preliminary approval yesterday.
• The Problem: The proposed $59 billion state budget for the next two years is $1 billion out of balance because revenue estimates do not cover planned expenditures. Until Friday, House Republicans had vowed to close the gap without raising taxes, even if it meant cuts in popular programs and services.
• The Proposal: The Republicans' bill, HB 1488, sponsored by Phillip A. Hamilton (R-Newport News), would eliminate 13 categories of sales tax exemptions for businesses. The bill was put on a fast track. The House Finance Committee approved the measure 13 to 8 the same day it was introduced and sent it to the House floor for debate yesterday.
• The Debate: Supporters said the bill would end some unnecessary tax exemptions and help balance the budget without imposing new taxes on average people. Opponents said the plan was a poorly researched rush job and would hurt businesses that are important to Virginia's economy.
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