Author Archives: Steve Haner

By Steve Haner

The new chair of the House Finance Committee has introduced a major long-term tax reform proposal that will help most Virginia families, and the former chair of the same committee has offered a significant improvement to it. Both are good bills and combined they are great tax policy.

Delegate Vivian Watts, D-Fairfax, has proposed House Bill 735 to apply an annual inflation adjustment to Virginia’s income tax brackets, credits and the standard deduction. The federal tax code does that, recognizing that without that simple adjustment a progressive tax system becomes more and more regressive over time. Without indexing inflation provides the government with an annual unearned raise and families with a sneaky annual tax hike.

Delegate Lee Ware, R-Powhatan, dropped in House Bill 1717 right on the deadline Friday, to increase the standard deduction used by most Virginia taxpayers from the current $9,000 per married couple to $12,000. That was the standard deduction level recommended in several bills during 2019, and the Assembly did raise the amount – just not that high. It remains a goal of the Thomas Jefferson Institute for Public Policy.

Neither bill has been “scored” by the Department of Taxation, and once their fiscal impact is estimated the outcries from the spending crowd will begin. Were they to pass, there would be a large tax cut in the early years, followed by a general downward bend in Virginia’s future revenue growth. Tax policy should be considered without respect to the appetite for spending, if only because it will never keep up.  Continue reading →

By Steve Haner

More than 400,000 Virginians failed to receive their $110 “Windfall Income Tax Rebate” in 2019 because, for perfectly valid and acceptable reasons, they didn’t file their returns by July 1.  That allowed the Commonwealth of Virginia to hold onto $46 million more of the un-legislated state tax increase created by conforming to new federal tax rules.

Some undetermined number of those were military families with a Virginia “tax home” who routinely get extra time to file. It could include servicemen and women deployed in combat zones.

Del. Jason Miyares, R-Virginia Beach, had his House Bill 607 all teed up to fix that today in the House Finance Committee. It would have allowed those late filers to get the rebate this year, instead. But the bill was not up for quick action today in order to pass, but in order to die. The Northam Administration was prepared to oppose the bill and seek its defeat, given it blows a hole in the revenue estimates for the new budget. Continue reading →