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3 responses to “Tax Conformity Addendum: Has Virginia Already Conformed?”

1. 

   LarrytheG

   June 21, 2018

   I guess I might be confused. I was under the impression that if the Feds cut taxes …and Virginia “conformed”, it too would receive less income as it starts
   it’s computations with Federal taxable income after exemptions and deductions are subtracted from adjusted gross.

   In theory – if the Feds tax less in general, then Virginia would also end up with less taxable income if it “conformed”.

   So that would not increase revenues but reduce them.

   I’m sure Steve can straighten me out….

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2. 

   Steve Haner

   June 22, 2018

   Very short answer: Congress broadened the base by reducing deductions, thus increasing the amount of income subject to tax. But Congress also lowered the rates. If Virginia conforms to the first step but leaves its rates unchanged, Virginia collects more tax.

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3. 

   LarrytheG

   June 23, 2018

   Thanks. I had been under the impression that the net result of the tax cuts was less money for the Feds and it was paid for by increasing the deficit. The States if they took in less because taxable income of most taxpayers was less than before (due to the tax cut) then Virginia would also not take in as much.

   I did not realize that Virginia will actually take in more.. which puzzles me. I guess some homework is needed.

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