First published Tuesday by the Thomas Jefferson Institute for Public Policy.
In 1972, a Virginia taxpayer needed a taxable income of $12,000 before the state’s maximum income tax rate kicked in. Adjusted for inflation, that threshold should be $78,000 today.
There has been one adjustment since, to $17,000 in income before the maximum rate is now applied. Adjusting that for inflation since 1987, when last amended, that should now be $40,000. In Virginia today, even a lower middle-income couple can be paying the same maximum tax rate as the richest Virginians on parts of their income. Continue reading →
In doing a deeper dive on the CNBC Top States for Business rankings, two quotes keep running through my unsettled mind.
Why unsettled? Well, last year I posed this question to Virginia FREE’s Board of Directors:
If Virginia was a stock, would you Buy, Sell, or Hold?
Not one said Buy. They all said Hold. Thankfully, no one said Sell.
So, the first quote comes from New York Yankee Hall of Fame catcher Yogi Berra who is now more famous for his Yogiisms than his playing. This one was an answer to a question about a famous New York City restaurant — was it still as good as it used to be?
Eating The Bait is the improbable story of Harrisonburg’s Golf Course, and how it came to be, told in a decidedly non-linear fashion by a non-objective observer. The whole sick, sad, silly, sorry, sordid story of the destructive, polarizing, maddeningly frustrating and ultimately hilarious battle over whether a city in the Shenandoah Valley — where little happens, nor should it — should build a golf course. Caution: the story is carefully doctored by a key player to make it more exciting and occasionally uses 4-, 11-, 12, and 7-letter words to express frustration and drama.
In April 1999 the City of Harrisonburg decided to build a golf course. “City” is capitalized here because the phrase refers to the government of the city, in all its majesty and error. The course was touted as raising the quality of life in the city, increasing city revenues, and helping make Harrisonburg a first-class city.
The only real catch, as the City Council voted 5-0 to launch the project and the city staff began making plans and spending money, was that the city didn’t want a golf course. And by “city”, non-capitalized, I mean the people who lived in the city, paid the taxes and owned the government that the council and staff only held in trust. Two polls and an election bore out the fact that a landslide of city voters and an overwhelming majority of its citizenry did not want the golf course.
The City didn’t care. The City knew better. And the city still bears the scars. Continue reading →
As corporate America becomes more woke, placing ever greater emphasis on the diversity of its workforce and executive management ranks, it should come as no surprise that CNBC, which is part of the NBCUniversal corporate media complex, has incorporated wokeness into its annual ranking of Top States for Business.
“We have expanded our measures of inclusiveness, looking more deeply at protections against discrimination, as well as at voting rights and current efforts to expand or restrict access to the polls, based on legislation enacted as of June 1, 2021,” says CNBC in explaining its methodology for ranking the 50 states — in which Virginia scored the top spot for the second year in a row.
Democrats and their allies in the media are crowing about Virginia’s No. 1 ranking this year, the top spot nationally for the second year running. “Virginia Republicans have been warning Democratic control was bad for business,” states the headline of a Virginia Mercury article this morning. “CNBC disagrees.” It turns out that legislation criticized by Republicans as bad for business, continues the story, “actually helped the state’s business reputation.”
I am skeptical. But it’s a hypothesis that Republicans, conservatives, and free marketeers need to consider. Have corporations become so woke that they are adjusting their capital-allocation algorithms in favor of politically progressive states? Or is CNBC so encapsulated in the left-wing media bubble that it has become unplugged from reality? Continue reading →
Michael Martz with the Richmond Times-Dispatch writes on Governor Ralph Northam’s hamfisted attempt to use the public trust for partisan gain with a $350 million rescue package paid for by John and Jane Q. Taxpayer.
The proposed package also includes the help requested by Virginia Tourism President Rita McClenny, who appeared before the House and Senate budget committees this year to make the case for aid to the tourism and hospitality industry.
Those businesses employ about 10% of workers but represent 45% of the jobs lost during the pandemic, she told Senate Finance in May. “We want to prepare our communities to open their doors to visitors.”
Of course, the commonwealth is awash in federal COVID relief to the tune of $4.3 billion dollars. One might even be encouraged to think that Northam — true to the spirit of pandemic — might even be inclined to treat the public relief as a public opportunity to show public solidarity with all Virginians.
Instead, Northam and the Virginia Democrats chose to turn a taxpayer-fueled bailout into a partisan romp. Continue reading →
Virginia ranks #1 in the “Top States for Business 2021” ranking produced by the business network CNBC, but it is important to dig into the ten measurement categories. They are not weighted evenly. Changing the former “Quality of Life” measure to “Life, Health and Inclusion,” and adding more points to that category, sealed the deal for Virginia’s latest recognition at the top of that chart.
Virginia’s Cost of Living score remains abysmal, number 32 among the 50 states. Cost of Doing Business, the category with the most weight, had Virginia right in the middle of the pack at number 26. The other overweight category is Infrastructure, and again Virginia had a middling rank at number 24.
Where Virginia’s total score shot past the other top states was in the revised Life, Health, and Inclusion score. At number eleven, it was way ahead of the number two through number five states, North Carolina (ranked 37 in that area), Utah (27), Texas (49) and Tennessee (46).
Virginia’s best rankings, and these have buoyed us all through the history of this report, were Education (number 2) and Workforce (number 3).
Governor Ralph Northam will take and enjoy the victory lap that comes with this recognition, the fifth time Virginia has topped the list in the 14 times it has been published. Fellow Democrat and former Governor Terry McAuliffe -– now seeking another term — will try to share the spotlight, although his term produced drought years with Virginia always out of CNBC’s top five and twice out of the top ten. Continue reading →
They rank their top 10 states: Virginia – North Carolina – Utah – Texas – Tennessee – Georgia – Minnesota – Colorado – Washington – Ohio.
Chief Executive Magazine in April ranked their top 10 states thusly: Texas – Florida – Tennessee – North Carolina – Indiana – South Carolina – Ohio – Nevada – Georgia – Arizona. Virginia comes in at #13 for them.
Congratulations are due the Northam administration. For the second straight year, Virginia ranks No. 1 in CNBC’s list of the top states for business. There are many best-business rankings, but CNBC’s is the most prestigious. Hopefully, the Old Dominion will see increased interest from corporate investors as a result.
Some will say that the No. 1 ranking vindicates the spending and regulatory policies of the Northam administration and Democratic-dominated General Assembly, which we have described as anti-business on this blog. I disagree. Bacon’s Rebellion will explain why shortly.
But I don’t want that discussion to cloud the good news. Let’s spend a moment basking in the PR bonanza.
The Luxembourg-flagged Vole Au Vent is seen here installing one of Dominion Energy’s two experimental wind turbines 27 miles off the Virginia coast last year. Photo credit: Dominion. An American-made vessel will install the next 180 or so turbines.
by James A. Bacon
The primary justification for spending $7.8 billion to build a wind farm off the Virginia coast at a significantly higher cost per kilowatt than other energy sources is to advance Virginia’s goal of achieving a zero-carbon electric grid by 2050. But an important secondary consideration is the hope that the project will jump-start the creation of a new industry in Hampton Roads serving the emerging East Coast offshore wind industry.
Virginia has deep channels, no bridge obstructions, an active maritime community, and perhaps the nation’s largest shipbuilding industry. Dominion Energy’s Coastal Virginia Offshore Wind Project, it is hoped, will catalyze development of a multibillion-dollar offshore wind-energy industry in Virginia.
That case is a little harder to make these days. When Dominion decided to invest $500 million in building an offshore wind-turbine installation vessel, none of Virginia’s shipbuilding companies was interested. All were booked up with Navy contracts. The vessel, named after the mythical Greek sea monster Charybdis, is being constructed in Brownsville, Texas. Continue reading →
Northern Virginia’s population is growing, but not nearly as fast as before. According to a new study by University of Virginia demographer Hamilton Lombard, Northern Virginia accounted for 66.5% of the state’s population growth between 2010 and 2019, but slipped to 33.7% in the last year.
“While Northern Virginia is still growing in population, its recent slowdown is remarkable given how long so much of Virginia’s population growth has been concentrated in Northern Virginia,” Lombard said in an interview with UVA Today. “Since 1980, Northern Virginia has contributed to over half of the commonwealth’s entire population growth. Earlier in the 2010s, over two-thirds of Virginia’s population growth occurred in Northern Virginia.”
“Yet, since the mid-2010s, population growth in Northern Virginia has slowed considerably as more residents have left the region, often moving to other Southern states,” Lombard said. “Some of the initial out-migration may have been driven by the federal budget sequestration and shutdowns, which slowed growth in the region’s economy.”
Northern Virginia has driven demographic, political and economic change in Virginia over the past three or four decades. The region now dominates the state in much the same way that Chicago overshadows the rest of Illinois and New York City runs the Empire State. A marked slowdown in the region’s growth could have momentous consequences for Virginia’s economic prosperity and political economy. Here’s the big question: Was 2020 a transitory blip or does it portend longer-lasting changes? Continue reading →
Greenhouses have been used since the time of the Roman Empire. A couple of Virginia Beach entrepreneurs are planning to use this old technology to harness the sun’s energy in a big way.
Their company, Sunny Farms, plans to invest $60 million to build hydroponic greenhouses on more than 30 acres, about 25 football fields, over three years. It would be one of the largest greenhouse facilities on the East Coast. The goal is to produce fresh vegetables for the big box chain stores in Hampton Roads, as well as for military commissaries. In its first year of operation, the company projects it will grow 10 million plants. Continue reading →
The political wannabes in both parties and the state’s media are continuing to ignore it, but the argument over the proposed motor fuel carbon tax called the Transportation and Climate Initiative rages in comments on the proposal flowing into its advocates.
The Thomas Jefferson Institute has also launched a short video (above), perhaps just the first, to alert the public through more populist means. It features owners of two regional fuel businesses, well known as major local employers and taxpayers. Without doubt, Virginia’s membership in TCI would shrink and perhaps severely damage those businesses.
The video was actually ready to use had the 2021 General Assembly taken up the issue, but Governor Ralph Northam did not ask for legislative permission to join the interstate compact involved. The state remains involved in the planning for the cap and tax and ration scheme, now set for 2023 in the states who agree to the compact.
If put in place, all fuel Virginia wholesalers would need to buy government-issued allowances to sell gasoline or diesel, in effect a carbon tax. The amount of allowances will be frozen to prevent the any growth in fuel sales, and then decline annually to force down consumption, in effect rationing. Continue reading →
Image credit: “Has the Pandemic Changed Cities Forever?”
by James A. Bacon
If you’re looking for a good Sunday read, consider an article by Tim Sablik, “Has the Pandemic Changed Cities Forever?“, in the Richmond Federal Reserve Bank’s Econ Focus. Sablik does a fine job of sketching out the big issues identified by the nation’s leading urbanologists as they ponder the impact of the COVID-19 epidemic on urban development.
In a nutshell, Sablik argues that (a) the epidemic has clobbered the urban cores of American metros as knowledge workers have drastically changed their work habits and personal preferences, (b) that the pendulum will swing back partially as the epidemic subsides, but that (c) things will not go back to the way they were. There are profound implications for cities and counties in Virginia as they plot their futures. Reading Sablik essay is a good place to start any re-evaluation. Continue reading →
The overall effective tax rate on various kinds of businesses in Virginia, and how they rank against the other 50 states. (Lowest = #1) Click for larger view. Source: Tax Foundation and KPMG LLC
by Steve Haner
Virginia is far more tax friendly to established businesses than it is to new ones. That’s one major conclusion of a major state-by-state business tax comparison released today (here) by the Tax Foundation and KPMG LLC.
In neighboring North Carolina, on the other hand, the tax structure encourages new investment with more attractive rates for incoming businesses of several types. It has been a conscious strategy for that state’s political leaders for some time.
Instead of seeking to put an overall ranking on the state’s business tax climate, as has been done in the past or in other studies, the Tax Foundation devised eight imaginary firms in different industries and then calculated their effective tax rate in each of the fifty states. It used tax laws and incentives as they were in force January 1 of this year.
One of the principal authors is a former General Assembly legislative aide well known around our capital, Jared Walczak, now a vice president at Tax Foundation. This approach of comparing how the various states would tax a set of reasonably typical firms is a big step up from previous methods. Continue reading →
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