Category Archives: Taxes

Northam: Take the Bricks Off the Life Rafts

My first post in two weeks. What the heck, I should join the parade and give a bunch of advice to our beleaguered Governor which he is likely to ignore.  This first appeared today in the Fredericksburg Free Lance-Star. It has one of those annoying “take a survey” paywalls, but in this case asks a question we should all answer. Try it.    

By Steve Haner

The assumptions underlying the most contentious debates of the 2020 General Assembly session are gone. Sixty days ago, activists were arguing that this was a rising economy and state government should mandate raising workers to a higher level.

This is a now sinking economy, and the General Assembly’s actions have piled bricks on the life rafts that workers in the commonwealth will need to survive.

The priority now is containing the spread of this respiratory virus, but soon it becomes reviving an economy that has come to a near stop. Nobody knows when or where unemployment will peak, but this is starting to look more like 1929 than 2009.

Gov. Ralph Northam’s lasting legacy will not be his response to the virus, but the speed of the following recovery.  Continue reading

Sweet 16 (Tax Bills) Will Cost Virginians Billions

By Steve Haner

What will this year’s General Assembly cost you in taxes? Here are at least 16 bills approved by the 2020 General Assembly that create or raise taxes on Virginians or authorize a local government to do so. No one told Virginians at the start of session that major tax increases were coming, and there is little recognition of what has now happened. It is time to tally the bill.

If anybody would or could run the fiscal projections on these 16 tax bills, they might combine into a major tax hike comparable to those in 2004 and 2013. Over several years this will cost families or businesses billions of dollars, but most will be collected by wholesalers (cigarettes and fuel) or too deeply buried on receipts to see.  Assessments on business eventually get passed down to the customer: you.  Continue reading

Electric Yellow School Buses? Pure Green Grease

By Steve Haner

Having voted to give Dominion Energy Virginia a blank check to spend billions of your money on offshore wind turbines, the Virginia House of Delegates will vote today to provide hundreds of millions more from your pockets for electric school buses.

Last week the House defeated a similar bill, twice. It received only 35 votes the first time and 44 votes the second. The response from the utility and the Senate patron was to introduce a new bill “Thursday,” after she received unanimous consent from her fellow senators.  Continue reading

How Virginia Would Fare Under President Biden, Part 1

By DJ Rippert

And then there were two. Today, Elizabeth Warren announced that she will withdraw from the presidential race. That leaves Joe Biden, Bernie Sanders and Tulsi Gabbard (yes, she’s still running) as the remaining candidates for the Democratic nomination. Given that Tulsi Gabbard has exactly one delegate (from American Samoa where she was born), the odds of her prevailing are so low that the race can safely be considered a two- man contest. Two weeks ago Joe Biden’s campaign seemed deader than disco. Then came Super Tuesday. Now he’s the front runner.

It seems worthwhile, then, to consider how Biden’s announced policies would affect Virginia if he were elected president this November. Politico keeps an updated list of the candidates’ positions on the issues which you can see here. Politico records the candidates’ positions using fifteen categories. This blog post examines the first five categories — criminal justice, economy (excluding taxes which is a separate category), education, elections and energy (including the environment and climate change). The remaining ten categories will be examined in future articles.

Continue reading

A Series of Hidden Tax Hikes In the Bag

The bag tax is 5 pence in Scotland, but will be 5 pennies here in Virginia.

By Steve Haner

Politicians hate taxes that voters pay by check and love taxes that are buried deep on invoices or fully invisible. The 2020 General Assembly is raising taxes right and left (mostly left) but focused on that second method. These will be tax increases most people will never spot.

Governor Ralph Northam’s record introduced budget was based on several proposed tax increases (and of course the extra money collected by breaking his promise to continue last year’s tax reform effort). But legislators have not been shy, only sly, about building on that base with additional levies.  Continue reading

Cabinet Officers: Assembly Decides on Carbon Tax

Delegate Poindexter

By Steve Haner

Thanks to the persistence of Del. Charles Poindexter, two members of Governor Ralph Northam’s cabinet are now on record stating the General Assembly will decide whether Virginia joins the carbon tax regime called the Transportation and Climate Initiative. In 2018 both of them had signed a letter endorsing the interstate compact to reduce the use of gasoline and diesel fuel for transportation.

The Franklin County Republican was addressed by Secretary of Natural Resources Matt Strickler in a meeting of a House Labor and Commerce Committee subcommittee January 30, and Strickler dismissed Poindexter’s use of the word rationing to describe TCI. “I’m not sure where the idea of rationing comes from. I think that’s pretty hyperbolic language,” he scoffed.  Continue reading

Consistency? Seek it Not at the General Assembly

The Virginia Constitution grants exemption from local real estate taxes for veterans with 100% service-related disability and for the Gold Star families of those killed in action, a move enthusiastically endorsed by voters in 2010. But in a House Finance Committee subcommittee this morning Virginia’s local governments presented the General Assembly with a bill.

The subcommittee endorsed two bills to provide localities reimbursement from the state treasury for the real estate taxes foregone. House Bill 363 from Del. Mark Cole, R-Fredericksburg, would allow the reimbursement once the tax exemption amount exceeds one percent of the overall local real estate tax revenue. House Bill 1496 from new Del.Martha Mugler, D-Hampton, did not set a threshold and would reimburse all lost revenue.  Continue reading

Updates: Electoral College, Carbon Tax, Tax Reform

The benches along this sidewalk are still missing, having been removed for the gun rights rally. Can we have them back for next week’s February Thaw?  Please.

By Steve Haner

Catching up on several issues previously discussed, with links to the original posts:

Virginia’s 2020 Electoral Votes Still Ours to Award. Pending legislation to enact the National Popular Vote regime has now failed in both House and Senate committees, although nothing is really dead in this process until final adjournment in March.  The House bill died in House Privileges and Elections Friday, with three Democrats joining nine Republicans to reject. The Senate version was stricken at the request of the patron a few days earlier. The National Popular Vote is an interstate compact of states agreeing to grant their electoral votes to the presidential candidate with the highest national total vote, but it only kicks in once enough states to control the outcome have joined. Perhaps the idea of Virginia’s electoral votes going to Donald J. Trump, without regard to Virginia’s vote, finally occurred to some Democrats. But complaints about the Electoral College persist and so will this idea.

Secretary of Natural Resources on Transportation and Climate Initiative. Twice last week Secretary of Natural Resources Matt Strickler faced questions from Republican legislators about the state’s plans with regard to the proposed interstate compact on fossil fuels used in cars and trucks. Continue reading

Tax Reform Dies at Dawn, Tax Hike Fares Better

Richmond region business, government and transportation leaders line up at a dawn subcommittee meeting today to support $179 million in new regional taxes for transportation. More details at the end of the post.

By Steve Haner

The change in leadership in Mr. Jefferson’s Capitol has left one bad trend intact:  The House Finance Committee still worries first and foremost about whether any tax policy change – no matter how meritorious — would interfere with state spending. It was the same under Republicans, unfortunately.

New House Finance Chair Vivian Watts, D-Annandale, who waited patiently through the entire Republican majority era for her turn with this gavel, used a subcommittee meeting this morning to kill one of her own bills, the best tax policy proposal in the hopper for 2020. Her House Bill 735 would have required several elements of the state tax system to be adjusted annually for the effects of inflation.

The subcommittee — which meets at dawn on Fridays — also delayed for an entire year action on Del. Watt’s proposal to reinstate a Virginia estate tax and provided the first positive vote on a major transportation tax increase for the Richmond region, modeled on similar regional taxes elsewhere in Virginia.  More on those later in this story.

The Watts bill to adjust tax brackets for inflation had been endorsed by the Thomas Jefferson Institute and the group often at odds with us, the Commonwealth Institute for Fiscal Analysis. Both of us at the podium singing Kumbaya (one chorus at least) would have been a nice Instagram moment.  Continue reading

Analysis: Only Assembly Can Impose Carbon Tax

By Steve Haner

It is illegal in Virginia for a petroleum wholesaler to arbitrarily reduce the amount of product it provides to retailers. The General Assembly has intervened in that marketplace, probably for the reasonable public purpose of preventing price gouging. Regulating the sale of fuel for some other purpose should also require action by the General Assembly.

The “other purpose” under scrutiny at this time would be reducing carbon dioxide emissions into the atmosphere. David Schnare of the Thomas Jefferson Institute for Public Policy was researching whether the governor could impose the Transportation and Climate Initiative on Virginia without General Assembly action. He found and cites the existing state law against rationing gasoline and other legislative oversight of that market in an analysis published today.

Schnare holds both environmental and law doctorates and served 34 years with the federal Environmental Protection Agency. His conclusion is the Governor lacks the authority to act arbitrarily through an executive order or agency decision.  t was the same conclusion reached recently by the Supreme Court in Washington state in reviewing and rejecting a cap-and-trade effort from that state’s governor, Jay Inslee.

Here’s the take on that from the Wall Street Journal editorial board:

Good news: The political panic over climate change doesn’t justify one-man rule. That’s the message the Washington Supreme Court delivered this week to Governor Jay Inslee, who tried to impose his command-and-control agenda by fiat.

Perhaps you heard Mr. Inslee for a millisecond in the presidential race last year declaring that climate change is “the most urgent challenge of our time.” He failed to galvanize the masses, much as he failed to persuade the Washington Legislature in 2015 when it rejected his cap-and-trade proposal.

Continue reading

At Least Some Legislators Dream of Tax Fairness

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

Electoral College Vote, Carbon Tax, Labor’s Wants

By Steve Haner

The End of the Electoral College Looms

The legislature’s new ruling Democrats, having celebrated their adoption of the national Equal Rights Amendment, may continue their Constitutional aspirations next week and try to kill the federal Electoral College. Some believe the will of Virginia voters in choosing presidential electors should be overridden by the popular vote total in all fifty states plus the District of Columbia combined.

This idea is known at the National Popular Vote. Objections to the Electoral College process have a long history but were reignited when former Senator Hillary Clinton became the fifth presidential candidate who won the popular vote but lost the Electoral College. As predicted by Bacon’s Rebellion, the proposal to grant Virginia’s votes to the national front runner is back in three bills, with far longer lists of patrons and co-patrons. The two House bills are here and here, and the Senate version here. All now rest with firmly Democratic Privileges and Elections committees.  Continue reading

Be Careful What You Wish For

Judge John Dillon (look familiar to regular readers of this blog?)

by Dick Hall-Sizemore

For the participants on this blog who have longed for the lifting of the yoke of the Dillon Rule from the necks of local governments, major relief is in sight. However, you may not like the area in which it is being contemplated: taxation.

Generally, Virginia counties have less authority than cities and towns to levy certain taxes. Cities and towns have general authority in the Code to levy the following taxes: admissions, transient occupancy, cigarette, and meals. As far as counties are concerned, the General Assembly over the years has given individual counties, as specified in the statutes, authority to levy some of these taxes. In some cases, that authority carries limits and, in the case of the meals tax, it must be approved by local referendum to be effective.

As reported in today’s Richmond Times-Dispatch, legislation has been introduced in both houses of the General Assembly to provide counties the same taxing authority as cities and towns. Furthermore, it seems that these bills have widespread support. Particularly striking is HB 785, introduced  by Del. Vivian Watts, D-Fairfax, chairman of the House Finance Committee, the committee that has jurisdiction over tax bills. Co-patron of the bill is Del. Terry Kilgore, a senior Republican from Scott County. The bill would provide counties general authority to levy these taxes, without any caps or referendum requirement.

If any of these proposals are enacted and your county subsequently adopts a new tax or increases an existing one, you can’t blame those Democrats in Richmond; you need to blame your board of supervisors. And, of course, these measures would not eliminate the application of the Dillon Rule in the Commonwealth. What the General Assembly giveth, the General Assembly can take away.

No $220 Rebate Checks for Military Families?

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

Yet Another Tax Increase Proposal

Del. Delores McQuinn. Photo credit: Richmond.com.

Del. Delores McQuinn, D-Richmond, has submitted a bill, HB 1541, that would raise taxes in Central Virginia by 2.1% on wholesale fuels (about 7.6 cents per gallon of gasoline) and 0.7% on the sales and use tax to fund regional transportation projects.

The taxes would raise an estimated $168 million a year. Fifty percent would be returned to the localities for projects that would “improve local mobility,” including roads, sidewalks, trails, mobility services, or transit; 35% would go to a Central Virginia Transportation Authority; and 15% would be dedicated to mass transit in Planning District 15.

McQuinn said the dedicated funding is critical to improving access to public transportation, especially for low-income residents who have no other way to get to jobs or amenities in the region, reports the Richmond Times-Dispatch. Said she in a meeting with leaders from four localities in the region: “Transportation has become to me almost a civil rights issue.”

A civil rights issue? Wow! I always thought of “civil rights” as ensuring that all Americans enjoyed the same constitutional and legal protections. Now, it seems, the concept of civil rights has expanded to the idea of redistributing income from motorists and consumers, many of them low-income themselves, to trendy priorities favored by urban white elites under the guise of helping minorities and the poor. Continue reading