Tidying up the Tax Code

Not exactly Saint George slaying the dragon… but it’s a start.

At last the General Assembly is doing useful, even if it’s not terribly consequential. The House of Delegates voted Wednesday to pass a bill that would strike 34 unclaimed tax credits from Virginia’s tax code. The bill, introduced by Sen. Walter Stosch, R-Glen Allen, would declare a tax credit obsolete if it hasn’t been claimed in five years, reports the Capital News Service.

By definition, the measure will have minimal impact on tax revenues. If no one is using the tax credit, it’s not costing the state anything… which probably explains why the measure passed 92 to 6. If nobody is benefiting from a tax credit, there’s nobody to lobby to keep it.

It’s refreshing to know that our ever-vigilant legislators are willing to make the tough call to eliminate tax breaks that nobody is using. Now, if only they would tackle the special tax breaks that people are using. Deleting those from the tax code, creating a broader tax base and leveling the level playing field would represent a real step forward.

4 Responses to Tidying up the Tax Code

  1. An excellent move. Delegate Mark Keam proposed to go further and require reexamination of tax credits, including sales tax exemptions, every five years. Another good proposal.

  2. unclaimed tax credits??? WTF? what happened to the idea that if you offered incentives and taxed less… you’d get more of it?

    this is comical…this bills passes and Chap Petersons “sunset” bill fails?

    I suspect DJ is bouncing off the walls about now.

  3. I don’t know how that bill can be legal, how a provision in the Code of Virginia can simply fall invalid without a specific vote of the Assembly. It wold be like saying murder is no longer illegal if nobody is charged for five years. This sounds great and a bill to simply repeal those specific provisions would have raised no issues — except it would have activated the lobbyists corp. This is an admission that the General Assembly lacks the will to actually do this right.

    All such tax credits and preferences should be on a five year sunset, requiring a recorded vote every five years to keep them alive. And before that is done each should be evaluated for what their financial impact has been (on both the state and the recipients.) JLARC did a major study recently and indentified several questionable tax credits, most notably coal-related tax credits, but the Assembly lacked the will to stand up to the interest groups and change anything.

  4. @Breckenridge

    I don’t they lack the will.. I think they have strong will to NOT want sunset provisions.

    We keep saying they don’t have the will but I think we misunderstand. They do have the will but it’s the opposite will as to what we support.

    the GA thinks, with strong justification, that most of us are clueless Rubes.

    At election time, they’ll spin the tale they know will get us to vote for them, then they’ll return to Richmond to group up as a party of like-minded who will then vote for what they think – we will not hold them accountable for – like NOT voting for sunset provisions.

    and you know what? they are right on both counts:

    1 – yes.. for the most part, we are clueless Rubes that fall for election talk vs their actual performance, i.e. we re-elect the same incumbents year after year – who refuse to vote sunset provisions

    2. – they KNOW we will continue to vote for them as incumbents as long as they tell us the right stuff at election time.

    DJ blames the clown show in Richmond.

    the truth is – the real clown show is us.

    we are the ones who put the incumbents back in office – every election – despite their refusal to really represent our best interests.

    Once the election is over and they are back in Richmond, voters are the furthest thing from their minds … it’s all about what their party wants and what the lobby folks want. We are “rubes” that they invite up to dog and pony shows on “lobby day”… which is truly a cynical joke .. a disrespectful joke on citizens.

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