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Gov. Bob McDonnell, (R-Va.), on his proposal to eliminate the gas tax and raise the sales tax.
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As a governor Jindal isn't the only one to be proposing radical changes to your State's tax code.
Virginia governor Bob McDonnell has a new plan that would a -- it has -- seventeen and a half cent per gallon gas tax.
It increase the state sales tax from five.
To five point 8% anti tax leader Grover nor was -- and move like this could be a Trojan horse for higher taxes.
Call the idea ambitious and innovate at Virginia governor Bob McDonnell joins us.
Fox Business exclusive governor thanks for coming on the show -- wanna do this what do you think -- achieve.
Well first got to build transportation destruction our state we've been.
Way behind we've got traffic -- regions of Northern Virginia the gas tax Willis is on a long term decline because of inflation alternative fuels.
And alternative and cafe standards leading to higher miles per gallon.
And therefore less gas purchase so.
I'm saying let's get rid of -- declining revenue source let's replace it with something will grow.
With the economy sales tax does that we already is part of the sales tax -- transportation now.
And that will get people motivated we'll have more time with families and we'll have -- good.
Good to get in the market and a safer way.
And -- infrastructure is critical to credit job so I think this will do it.
And I think we have a good chance to get a pass this -- -- bottom line to this is that you just think it's gonna create more revenue.
No it will be a revenue essentially a revenue neutral.
Transferred from the gas tax to the sales tax.
But the gas tax is -- long term on reliable source.
For building infrastructure but -- sales tax will grow not because as a tax increase but because the sales tax revenues have grown because of economic growth.
And therefore be of more predictable and reliable way to fund roads in the future.
But governor -- eating attacks -- things you want to discourage the last thing you -- discourages sales so it just seems like increasing the sales tax is not Smart for growth if that's mature actor.
Well I would disagree and it and I and I disagree -- does is say this is a tax -- it's not.
Were converting it to -- tax it's been proven for fifty years of being stable and reliable.
And I think if you see -- -- -- dolls good friends that's he's gonna go to a sales tax and away from things that are punitive.
On non people like go like corporate end -- personal income taxes so I think -- consumption based -- Is actually less regressive and more fair -- only pay if you buy things and so I think that is a better way from a conservative perspective.
To have tax policy and -- building infrastructure that's necessary that Natalie Chris jobs and more importantly.
Will create economic growth and our state -- awaited what do you think about Bobby Jindal is planning would you do something like that get rid of personal income tax and get rid of corporate tax.
We haven't looked at that -- that wide a scope of tax reform in Virginia I do think governor Jindal is a good friend is very innovative.
But he believes in the -- -- but I just outlined for you Melissa that is consumption based taxes are actually better than punitive taxes the tax.
Income or the means of production when you did this and precision that you're missing you haven't looked at would you consider the -- I think that it's it takes a while the -- that consensus to do that.
-- -- we've looked at those kinds of proposals today that this is a more modest form of tax reform made it.
And it transportation but I think up from a conservative Republican standpoint.
Are going to consumption based axes makes sense it's what's been done in Tennessee they don't have an income tax is what's but -- -- Texas.
And Florida Australia New Zealand I think -- about 1540 years ago they had an economic bonanza so.
I mean there's some pretty good evidence that these kinds of but tax reforms do war.
Liberals always -- you know argued that it's incredibly regressive that by hitting a sales tax you know you're discouraging people from consuming that you're taking the poorest people.
And your taxing them the same rate as the wealthiest so it's just very regressive as opposed to those people who can afford to pay more -- respond liberals like things like that.
Yeah I would disagree because most states Melissa like ours actually have exemptions for things like food.
And medicine and other essentials so that it is not regressive for those who depend who spent a lot of their disposable income on those things.
They will not pay -- -- in most states have exemptions like that so I think it's.
Probably -- -- Fair to say that government fixed coming -- we appreciate your time -- -- I have.
