Category Archives: Taxes

Why Virginia Job Growth Lags Region, Nation

Chesapeake Climate Action Network webpage boasting about the defeat of a gas pipeline expansion, a signal seen by location managers all around the U.S.

by Steve Haner

“Virginia’s economic recovery continues to outpace the nation… Our unemployment rate remains well below the national average and has fallen consistently every month for the past fifteen months… I’m proud of our roaring economic growth…”

So claimed Governor Ralph Northam (D) in a September 17 news release.

It came just after Virginia’s economy showed especially anemic results in August employment data, capping a period of poor performance effectively described in a recent Bacon’s Rebellion post by Richmond economist A. Fletcher Mangum.  Virginia’s job growth this spring and summer has trailed the vast majority of other states, with the August data placing us at a shameful 47th out of 50. Simply achieving the national average growth rate that month would have meant 75,000 more jobs. Continue reading

More Fun and Fraud with Numbers

by James A. Bacon

Let me preface this post by stating unequivocally that eliminating Virginia’s personal income tax is a crazy idea — so crazy that no serious person has proposed it. The tax generates $16 billion a year in revenue, or 72.4% of Virginia’s General Fund expenditures. The loss of such a sum would be catastrophic to the Commonwealth’s ability to provide basic government services.

According to Politifact, Republican candidate for Governor Glenn Youngkin briefly contemplated eliminating the state income tax. There is nothing inherently wrong with examining the possibility of doing such a thing. After all, several states — Florida, Texas, Tennessee, Washington — manage to do swimmingly without a personal income tax. However, any review of the situation would reveal that the dislocations in government services engendered by a massive re-engineering of Virginia’s tax base and budget would not be practicable, much less beneficial.

That said, some claims made against the idea are absurd. A Democratic Party of Virginia website, cited in a recent column by Arthur G. Purves, makes the claim that “implementing Youngkin’s tax plan” of eliminating the income tax (which was never his plan) would cost 2.5 million Virginia jobs. Out of a total workforce of 4.3 million. In other words, eliminating a tax accounting for 3.3% of the state’s GDP would destroy the equivalent of 59% of the state’s jobs over 10 years. Continue reading

Democrat Bunkum about Youngkin

Arthur G. Purves

In this fall’s Virginia gubernatorial campaign, Virginia Democrats are citing “a new independent study” to attack Republican gubernatorial candidate Glenn Youngkin, when Democrat policies themselves merit scrutiny. The Virginia Democrats web page does not cite the source of the Youngkin study but does link to the the website of the Virginia Education Association (VEA), whose political action committee has endorsed the Democrat candidate. The VEA page describes a study about “… Mr. Youngkin’s proposal to eliminate the personal income tax …” but does not link to an actual study. To request it, you must contact VEA Communications.

Try it. The reply was, “This study is being reserved for VEA members and members of the media.” (Though a long-standing member of the media, Bacon’s Rebellion publisher Jim Bacon received the same response.)

What are the Democrats and the “independent” Virginia Education Association trying to hide? Perhaps it is that Mr. Youngkin never proposed to eliminate the personal income tax. According to PolitiFact:

Continue reading

Of Course Tax Hikes Grew the State Surpluses

Senate Finance Committee data illustrated the expected state revenue boost caused by 2017 federal changes. Predicted and seen in 2019 and 2020, it carried over into 2021.

by Steve Haner

At Tuesday night’s debate Democratic gubernatorial nominee Terry McAuliffe dismissed the 2021 $2.6 billion general fund revenue surplus as entirely due to extra federal COVID relief funds, which is absurd on its face. By definition, every dollar is general fund state tax revenue. It came from some form of state tax.

Why do Virginia Democrats continue to deny that recent state tax law changes are in part responsible for almost-embarrassing large cash surpluses recently announced? At the time the deeds were done, nobody was denying the big revenue impacts. The really big hit was a totally bipartisan decision, so Democrats can share the credit or blame.   Continue reading

More Ignored News: Bag Tax Coming to Richmond

From American Progressive Bag Alliance flyer opposing local bag taxes.

by Steve Haner

The plastic bag tax recently approved in Roanoke and several Northern Virginia localities, created by the General Assembly in 2020 as a local option, is also coming to the City of Richmond. It was promised in the same September 13 Richmond City Council “climate crisis” resolution that implied a future closure of the Richmond Gas WorksContinue reading

Conference Explores VA Rush to Copy CA Energy

by Steve Haner

Californians were again this week under an electricity “flex alert,” a conservation order required because of its reliance on unreliable solar and wind energy. They often cannot keep up with demand on the hotter days. Is this Virginia’s future? The government is telling Californians:

  • Set your thermostat at 78° or higher
  • Avoid using major appliances
  • Turn off unnecessary lights
  • Use fans for cooling
  • Unplug unused items.

The return of this power shortfall comes just days before Governor Gavin Newsom faces a recall vote, with this growing crisis being cited by some of his opponents. It is also a distant cloud on Virginia’s horizon as early voting begins here next week in the elections for statewide offices and the House of Delegates.

Virginia has rushed to copy California’s climate-fear and rent-seeking driven solar and wind energy scheme. Continue reading

Democratic Lawmakers Threaten Spending Bill Over SALT Cap Repeal

Image by Steve Buissinne from Pixabay

Tax that man behind the tree. As Congress works to pass a $3.5 trillion budget reconciliation package a group of “moderate” Democrats are threatening to block the spending bill unless the State and Local Tax (SALT) caps are repealed. Prior to Donald Trump’s 2017 tax law, state and local taxes were fully deductible on federal income tax returns (for itemized filers). The 2017 tax law, passed at the urging of Donald Trump, limited the SALT deduction to $10,000. This cap has long rankled Democrats elected to office in high-tax, high-spending locales such as the New York metropolitan area and San Francisco. Closer to home the cap also impacts people living in Virginia’s high-cost, high-tax areas like Northern Virginia. Continue reading

Youngkin Promises to Reverse Northam Tax Hikes

by Steve Haner

Republican gubernatorial nominee Glenn Youngkin is proposing to reduce Virginians’ taxes in much the same way Governor Ralph Northam raised them: Use several individual proposals, some not all that large, which accumulate into a significant change.

As Northam ends his term, his attitude seems to be, what tax increases? He claims the current $2.6 billion general fund surplus and the almost $400 million transportation fund surplus are due to economic growth. Continue reading

Solar Industry Poll Favors (Surprise) Solar Industry

by Steve Haner

You will never find a better example of blatant question bias in a poll:

“Do you agree or disagree that solar farms are better than other types of development because they do not pollute the environment and help lower the cost of electricity for homes and businesses?”

They “do not pollute” and “help lower the cost for electricity.”  With a tilt like that in the question, the amazing thing is that only 56% of a sample of Virginia voters said sure, I agree, and a full 20% still disagreed, the rest unsure.

There are other examples of biased question design in the poll, released a couple of days ago by a solar industry front group with the convenient and laughable name of “Conservatives for Clean Energy.” Sure, a bunch of conservatives looked up from the latest Tucker Carlson rant, passed on another discussion of the stolen election, and decided instead to pool their money on a poll focused on:

  • The Virginia Clean Economy Act
  • Attitudes about Virginia woods and farmlands being converted to miles and miles of solar panels
  • Virginia’s continued participation in the PJM Interconnection grid

No, this is an industry backed operation, definitely tied to solar developers but the fine hand of a utility might be discerned, as well. Only somebody totally in bed with the solar industry or less than honest would accept this at face value as coming from disinterested “conservatives.” Continue reading

Loudoun’s Golden Goose Lays Fewer Eggs

Data Center Alley. Photo credit: Loudoun Now

by James A. Bacon

Data centers may not support a lot of jobs, but they sure do pump up the tax base. In Loudoun County, home to the world’s largest cluster of server farms, the facilities were expected to support $11.2 billion in taxable assets. When the actual number came in $1.1 billion shy of forecasts this year, a mere $10.1 billion, the county generated $60 million less in tax revenue than expected, reports Loudoun Now.

Other Virginia localities that have been banking on data centers to bolster their tax base may encounter the same issue. They should consider themselves forewarned. Continue reading

DMV Still Hiding Full Gas Tax Amounts

by Steve Haner

The Virginia Division of Motor Vehicles is now hiding only 22% of the state’s existing motor fuels tax with misleading website data, not the 26% it was hiding when I wrote about this last year.

In the chart you first find searching DMV on motor fuel tax rates, set out below, there is no reference to a statewide wholesale tax of 7.6 cents per gallon on gasoline. It is MIA, leaving the chart reporting a tax of only 26.2 cents. (That is up 5 cents from a year ago, and that is why the percentage “hidden” dropped.) Continue reading

RGGI Tax Appears on Dominion Bills in September

Goodreads edition.

by Steve Haner

In a polite but clear “the emperor has no clothes” message, a member of the State Corporation Commission has questioned the need to impose a carbon tax to cut carbon emissions from electric generation by 30%, when the General Assembly has passed another law requiring a 100% reduction with no tax.

Judge Judith Jagdmann concurred with, but added her own comments to, an SCC opinion issued Wednesday that authorized another additional charge on Dominion Energy Virginia bills to cover the carbon credits demanded by the Regional Greenhouse Gas Initiative (RGGI).  A party-line vote in 2020 brought Virginia into that compact, and electricity generators have been buying carbon credits already for their coal and natural gas usage. Continue reading

If No Better Ideas Emerge, Go With These

By Steve Haner

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

How Not to Treat a Conservation Easement

Abandoned camper. Photo credit: Wikipedia

The Commonwealth needs to tighten up its system for granting and overseeing conservation easements, the Virginia Office of the State Inspector General (OSIG) has found.

One of three conservation-easement properties visited by OSIG auditors did not meet Conservation Value Review Criteria adopted to provide for quality conservation value. The inspectors saw “trash, old tires, scrap metal piles, old campers, inoperable vehicles, and a manure storage area that contained deceased cattle parts on the property.”

Additionally, easements between $500,000 and $1 million lacked restrictions for water quality, historical preservation and agricultural use when compared to easements resulting in tax credits of $1 million or more. Continue reading

The Middle Class’s Death by a Thousand Cuts

A Chinese lingchi execution, circa 1905. Source: Wikipedia

by James A. Bacon

Two items in the news today serve as a reminder of how the rules enacted by the American governing class benefit the rich, aid the poor, and tighten the screw on the middle class.

The new tax dodge. First, The Wall Street Journal describes the increasingly widespread tactic in which the super-wealthy borrow money at extremely low interest rates created by Federal Reserve Board monetary policy in order to avoid triggering the taxable event of cashing in capital gains. “You could buy a boat, you could go to Disney World, you could buy a company,” said one tax adviser. “The tax benefits are stunning.” The Journal describes the strategy as “Buy, Borrow, Die” — borrow money against stock holdings to pay for everything, and never pay income or capital-gains taxes. Ever.

The impact of super-low interest rates on the middle class is very different. The suckers and schmucks who pay taxes on their paychecks and manage to build a nest egg over a lifetime find themselves collecting near-zero interest on their bank CDs, money market funds, and treasury bills. While the super-wealthy borrow at near-zero rates to avoid taxes, middle-class Americans generate near-zero incomes on their savings — and get taxed on that miniscule income in the process! Continue reading