Category Archives: Taxes

Will McDonald’s Be Leaving Virginia? Not This year, But…

Posted on February 3, 2023 by | 40 comments

by Chris Saxman

I wish the headline of today’s column was just click bait. It originates from a headline that was pushed across my phone that read “Will McDonald’s be leaving California?”

That immediately made me think that McDonald’s corporate offices might be considering moving their headquarters from California to another state. Given the exodus of companies that have left the Golden State it would be just another news story about another company leaving California.

Quickly remembering that McDonald’s was based in Chicago, not California, I clicked on the article. The president of McDonald’s USA, John Erlinger, had written an open letter dated January 25th in which he lamented the legislative and regulatory reality of California:

Last fall, the legislature passed a bill – AB257, or the FAST Act – almost entirely at the behest of organized labor’s firm grip on many of the state’s lawmakers. It makes it all but impossible to run small business restaurants, but the impacts are far beyond that. Under the FAST Act, an unelected council of political insiders, not local business owners and their teams, would make big decisions about crucial elements of running a business, fracturing the economy in the process. [Emphasis added.]

Continue reading →

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Posted in Culture wars, Economic development, Elections, Entrepreneurs and Innovation, Government Finance, Labor and Workforce, Regulations and Government Oversight, Taxes, Uncategorized

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Dominion Seeks Return of RGGI Tax to Its Bills

Posted on February 1, 2023 by | 43 comments

The states currently in the Regional Greenhouse Gas Initiative CO2 emissions compact.

by Steve Haner

The on again, off again, direct tax on Dominion Energy Virginia bills to pay for the Regional Greenhouse Gas Initiative (RGGI) may be on again. If you feel like you are watching a shell game and just cannot find the pea, that is intentional.

In its sales pitch for its latest effort to create a more favorable regulatory environment, Dominion Energy Virginia is touting its proposal to take several of its existing stand-alone rate adjustment charges (RACs) and roll them into its base rates. The claim is that will save ratepayers $350 million. Continue reading →

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Posted in Energy, Environment, General Assembly, Regulations and Government Oversight, Taxes, Utilities

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Five Reasons the Assembly Should Cut Taxes

Posted on January 30, 2023 by | 2 comments

By Barbara Hollingsworth

Last week, the Republican majority in the Virginia House of Delegates passed a $1 billion package of tax cuts for individuals and businesses, the centerpiece of Governor Glenn Youngkin’s economic agenda. But Democrats, who have a 22-18 majority in the state Senate, have a laundry list of policies and programs they would prefer to spend the surplus money on rather than return it to taxpayers.

Tax policy is a non-partisan issue that has real-world economic consequences, especially when it comes to taxes on business income. Here are five reasons why the state Senate should follow the House’s lead and pass the governor’s entire tax relief package, including reduction of the commonwealth’s corporate income tax rate.

There’s a very large budget surplus.

In fact, Virginia is sitting on a record budget surplus of $3.6 billion, which is revenue collected from businesses and individual taxpayers in excess of the needs and priorities state legislators have already identified and fully funded during the 2022-2024 biennial budget process. It’s disingenuous to suggest that Virginia “can’t afford” to return at least part of that surplus to taxpayers. Continue reading →

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Posted in Business and Economy, General Assembly, Government Finance, Taxes

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New Youngkin Tax Cuts Total $7 Billion By 2028

Posted on December 22, 2022 by | 49 comments

Governor Youngkin’s major tax proposals and how much they save taxpayers. Source: Secretary of Finance. Click for larger view.

by Steve Haner

The set of Virginia tax changes Governor Glenn Youngkin (R) has baked into his proposed 2023 budget amendments is far more extensive and involves substantially more tax relief than the descriptions he offered in his December 15 presentation. Continue reading →

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Posted in Business and Economy, General Assembly, Government Finance, Taxes

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Youngkin Delivers Early Christmas Gift

Posted on December 21, 2022 by | 19 comments

by Barbara Hollingsworth

(This column was first published by the Thomas Jefferson Institute for Public Policy.)

Virginians received an early Christmas present this year. For four years, the Thomas Jefferson Institute for Public Policy has been strongly urging state officials in Virginia to lighten what has become a steadily increasing tax burden on residents and businesses in the commonwealth by enacting tax cuts and tax reform.

On December 15, during his appearance before the joint Senate and House of Delegates Finance and Appropriations Committees, Governor Glenn Youngkin took bold steps to do just that. The governor announced his plan to “accelerate” the state government’s transformation based on what he said was “driving better outcomes for less money.”

In his budget amendments to the 2022-2024 biennial state budget delivered to the General Assembly’s “money committees,” Youngkin proposed cutting taxes on Virginians by a billion dollars – in addition to the $4 billion tax relief bill he signed earlier this year.

Youngkin told legislators that the state, which is running a large surplus, can afford the tax cuts despite his acknowledgement that a national recession is looming. “Our carefully planned budget balances spending priorities and tax cuts, with roughly $1 billion … conditioned on meeting our 2023 revenue forecast,” Youngkin told state lawmakers.

The governor wants to “finish the job of doubling the standard deduction” for state income tax filers, a long-time policy objective of the TJIPP. He also wants to reduce the individual income tax rate for the highest income bracket to 5.5% and eliminate state income taxes on military retirement pay. Youngkin said that these individual income tax reductions will save Virginians $700 million per year.

Under the governor’s plan, the corporate income tax rate for businesses would also be reduced from 6% to 5%, “the first step toward the ultimate goal of 4 percent at the end of our administration.” For small businesses, Youngkin is proposing a 10% Qualified Business Income Deduction. These measures, if approved by the General Assembly, would total $450 million in business tax relief annually. Continue reading →

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RGGI Tax, On Path to Repeal, Reaches $524 Million

Posted on December 12, 2022 by | 33 comments

Virginia’s two year take of carbon taxes under RGGI. RGGI table.

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy.

The tax on each ton of carbon dioxide emitted by Virginia electricity plants dropped to below $13 a ton in the most recent sale of CO2 allowances conducted by the Regional Greenhouse Gas Initiative (RGGI). That meant Virginia collected only $71 million in tax revenue for the fourth quarter, the lowest amount of the four auctions in 2022. Continue reading →

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Posted in Energy, Environment, General Assembly, Regulations and Government Oversight, Taxes, Utilities

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JLARC Agrees: Index Virginia Taxes to Inflation

Posted on November 14, 2022 by | 29 comments

by Barbara Hollingsworth

Inflation is eroding the value of each dollar earned by Virginians, making it harder for them to afford decent housing, put food on the table and educate their children. But what many Virginians don’t know is that they have also been paying more in state income taxes while their real income has declined because the commonwealth’s tax code is not indexed to inflation.

A new report by Virginia’s Joint Legislative Audit and Review Commission (JLARC) points out that state income taxes in the commonwealth “have far outpaced median income, because income brackets have not been changed since 1990.”

Thanks to inflation, state income taxes owed by a median filer have increased 173% since 1990, while that same taxpayer’s actual income increased only 108%. Continue reading →

29 Comments

Posted in Business and Economy, General Assembly, Taxes

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Virginia Business Tax Ranking Falls Again

Posted on November 8, 2022 by | 16 comments

Source: Tax Foundation

Virginia continues its long side in tax competitiveness this year with a No. 26 ranking in the Tax Foundation’s “2023 State Business Tax Climate Index.” That’s a decline from 25th place last year, 24th place in 2021, and 23rd place in 2020. As recently as 2017, Virginia’s business tax climate ranked 16th.

After eight years of political dominance by Democrats, Virginia has been transmogrifying slowly into New Jersey, which ranks 50th in the country on business taxes. It’s hardly a surprise that the Old Dominion’s middle-of-the-pack tax policy and dramatic fall-off in worker freedom (from A+ to C, according to the Commonwealth Foundation) has coincided with domestic population out-migration and sub-par economic growth over the decade.

On the other hand, Virginians can console themselves that the Commonwealth ranked No. 1 in Site Selection Magazine’s 2022 Business Climate ranking based on key site-location criteria selected by site-selection executives. Workforce skills was the top criterion, while workforce development resources and… wait, what?… tax climate were tied for the second most important factor. Continue reading →

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Posted in Economic development, Taxes

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Ungrateful Citizens of Fairfax County

Posted on October 8, 2022 by | 55 comments

Fairfax County Board of Supervisors Chair Jeff McKay credit FFXNow.com

by James C. Sherlock

Jeff McKay, Chairman of the Fairfax County Board of Supervisors,  can’t catch a break.

Violent crime is up. The Fairfax County Police Chief has declared a police emergency for staffing.

There has been a fairly brutal back and forth up there about who is responsible and who is or is not working to fix it.

Fairfax County Commonwealth’s Attorney Steve Descano, a George Soros acolyte, apparently has missed the news about the crime wave. His website emphasizes the reforms he has initiated since 2020. Understandably, he is not anxious to link those reforms to the crime wave. Take a look. You will be able to do it for him.

But this story is about Chairman McKay. After a big ruckus, he has moved on from crime and police shortages.

A recent story relates that he blames a lot of unsolved problems in Fairfax County — or what he assesses as problems — on the Dillon Rule. He chafes under its restrictions. He wants an exemption from that rule to make Fairfax County a city-state.

Not quite by the way, he wants authority to levy a local income tax.

Seriously. Continue reading →

55 Comments

Posted in Crime, Corrections and Law Enforcement, Culture wars, General Assembly, Taxes

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Map of the Day: Corporate Tax Rates

Posted on September 27, 2022 by | 16 comments

Why does Virginia have such an also-ran economy? Perhaps one reason, among many, is that its combined state and local corporate tax rate is higher than that of 24 other states. We’re not hostile to business like, say, Illinois or New Jersey, but we’re not welcoming either. — JAB

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Next Virginia Tax Reform: Index for Inflation

Posted on September 16, 2022 by | 15 comments

by Barbara Hollingsworth

Most Virginians are painfully aware ­­­­that it’s becoming much more difficult to make ends meet. Prices for fo­­­­od, housing, gasoline and other necessities have soared. Inflation hit a 40-year high of 9.1 percent in June, the largest yearly increase since January 1982. And a recent study from the University of Iowa found that a typical American had to pay $669 more for basic living expenses than they did just two years ago.

All while the Commonwealth of Virginia was pocketing $2 billion in “surplus” revenue that was not anticipated and therefore not included in the two-year $165 billion state budget the General Assembly passed earlier this year. Most of that windfall was the result of the Federal Reserve’s monetary inflation, which made the prices of consumer staples soar because there were suddenly a lot more dollars chasing the same amount of goods and services.

But inflation had another unwelcome effect. It also pushed Virginia taxpayers into higher tax brackets despite the fact that their actual living standards went down, not up.

Governor Glenn Youngkin wants to set aside $400 million for tax relief in his revised budget, which he will present to the state legislature in December. But that’s less than a quarter of the total surplus. The budget signed by Youngkin also includes $450 million to pay for potential cost overruns on the commonwealth’s capital projects due to … you guessed it …. inflation. Continue reading →

15 Comments

Posted in Business and Economy, General Assembly, Taxes

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Richmond Tax Assessments: Through the Roof

Posted on September 9, 2022 by | 66 comments

by Jon Baliles

One story you will be hearing about and living through in the next week or so (if you live in the City) is that the new assessment notifications are arriving in people’s mailboxes. And they are literally though the roof.

Some areas are up from 18% in the Westover Hills area and Scott’s Addition to 20% increases in the East End, to 41% in the Fan. Sales of homes in the last year are running super high which is driving valuations.

Richie McKeithen, Richmond City Assessor, says:

Richmond is seeing an influx of people moving here from New York, DC and Philadelphia. The normal vacancy rate for homes in the city is usually between 15% and 20%. Right now, it’s around 1%.

And they’re coming here, and they’re buying property, and they have resources to buy properties at a higher value than what we have them assessed for.

Continue reading →

66 Comments

Posted in Housing, Taxes

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What Surplus? Virginia Doesn’t Allow Surpluses!

Posted on August 22, 2022 by | 29 comments

Secretary of Finance Stephen Cumming’s slide showing most of the final surge of unexpected revenue before June 30 came from payments from business owners and investors. Click for larger view.

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy.

Does last week’s glowing report on Virginia’s state tax collections presage additional tax relief for struggling families? The first question is, was the news really glowing? Continue reading →

29 Comments

Posted in Business and Economy, General Assembly, Government Finance, Taxes

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Map of the Day: Fiscal Stress

Posted on August 14, 2022 by | 8 comments

The Commission on Local Government has published its 2022 update on the fiscal condition of Virginia localities. No surprises here — the same geographical patterns hold as in the past. The most stressed localities are uniformly cities, and the most stressed are small cities. The least stressed are counties in Northern Virginia and on the metropolitan fringe of Richmond. Two remarkable outliers, Bath and Highland counties, seem to be in great shape relatively speaking. View the report for details of your jurisdiction.

Of greatest interest is the change in revenue capacity between 2019 and 2020, the latest year covered. The biggest winner: Sussex County, with a gain of 14.5%. The biggest loser: Prince George County, with a loss of 4.o%. Continue reading →

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Turbocharged: Fairfax Car Tax Burden

Posted on August 12, 2022 by | 39 comments

A 2020 Rav4.

by Bill Tracy

Fairfax County just mailed out its 2022 Car Tax bills, and the tax increase is substantial.

The Board of Supervisors granted us a 15% discount off of the inflated 2022 Blue Book vehicle values. That’s nice, but it looks like the Board failed to mention that the car tax was increasing for a second reason: the “subsidy” was reduced for the first $20k value of the car.

Here are some car tax facts for my personal vehicle.

Base Case last year (2021):
Bill’s 2020 RAV4 Value 2021: $ 23,725
    Tax Before Relief: $1,084
    Tax Relief/Subsidy (under $20k Value): $525
    Net Car Tax Owed 2021: $558  Continue reading →

39 Comments

Posted in Taxes

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