Taxpayers “Clinging” to their Income in a Moderately Taxed State

Click to enlarge image. Data source:

by James A. Bacon

In his budget roll out yesterday Governor Ralph Northam proposed hikes to tobacco and gasoline taxes and a clawback to taxpayer relief fund enacted last year in response to changes in the federal income tax code — an increase in the tax burden well in excess of a half billion dollars a year. (In none of the articles and documents I’ve seen have I been able to locate a full tally — gee, I wonder why.)

In his presentation to the Joint Money Committees of the General Assembly, the governor made a revealing comment.

“Here in Virginia, we pride ourselves on being a low-tax state,” he said. Then, in the context of the tobacco tax, he added, “But it makes no sense to cling to the bottom of the rankings that costs us so much.”

“Cling.” Interesting word choice. At least Northam didn’t refer to taxpayers as “bitter” clingers.

It is true that Virginia has lower-than-average gasoline taxes and the second lowest tax on tobacco products. But the Old Dominion also had the 10th highest income tax collections per capita and 17th highest property taxes, according to the Tax Foundation based on 2012 data. Add it all up, and Virginia’s total state/local tax revenue as a percentage of state income ranked 27th in the country. That’s not a “low” tax state in my book, it’s a “moderate” tax state.

The chart above shows slightly different data based on FY 2020 data found on There I plotted state/local tax revenue against gross domestic product (GDP). As one would expect, there is a strong correlation between GDP per capita and state/local tax revenue per capita — the purple line shows the trend line for the 50 states. (I excluded Washington, D.C., because it was such a strong outlier.) Virginia (the red dot) is in the middle of the pack, but slightly on the positive side of the trend line, meaning that its state/local tax revenues are modestly below what would be expected given its GDP per capita.

Northam’s tax increases and clawbacks will move Virginia significantly toward the trend line and closer to the national average for state/local tax burden. By no stretch of the imagination, assuming the General Assembly adopts the governor’s tax proposals, will Virginians be able to “pride” themselves on being a “low tax” state any longer.

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6 responses to “Taxpayers “Clinging” to their Income in a Moderately Taxed State”

  1. Anonymous3444 Avatar

    I think it’s time to admit that the only political question about taxation that either major party will contemplate is not “how much”, but “from whom and given to whom”. From the poorest among us to obscenely bloated defense contractors? From those of us who take care of our health to those of us who do not? From younger to older? From people who look one way to people who look another?

    This is what politics is _for_ now.

    1. Steve Haner Avatar
      Steve Haner

      Yep. The saying in Richmond is: “Don’t tax you, don’t tax me, tax that fellow behind the tree.” There is capitalism and socialism but government has become mainly about “transferism.”

  2. djrippert Avatar

    Ralph Northam is typical of the plantation elite. He sees himself so intellectually and culturally superior to those outside of the plantation elite that he can tell one lie after another and never be found out. He is a legend in his own mind. From blackface to klan robes to infanticide to hiding taxes in hospital bills to “clawbacks” to low tax Virginia … the man cannot force himself to tell the truth or be transparent with his constituents (i.e. all Virginians). He is the worst governor of Virginia since Mills Godwin.

    The scrutiny Northam is under from Steve Haner and Jim Bacon is a blessing to all Virginians. Sure as heck neither the Washington Post nor Virginia Mercury will keep tabs on our slippery eel of a governor.

    The sad thing is that I could live with most of his policies but I can’t countenance his epic dishonesty. Virginia deserves better than this empty suit.

  3. Virginia is a bifurcated state.
    So when I see any article about Virginia’s relatively low taxes, I think of that as extreme low tax rates in RoVA, with NoVA heading to New Jersey status.

    Recent news story about Michael Vick owing $70,000 of back car taxes in Hampton is an example of the “Virginia Way” of keeping taxes low. We try to tax areas nobody else thinks of taxing, to say we have low taxes. Vick is darn lucky he did not live in NoVA he’d probably owe double that amount.

  4. LarrytheG Avatar

    The thing about Northam is that he is pretty much the opposite of a charismatic figure. I thought when he first announced his candidacy that between the fact that few voters really knew him and his really awful public presence that he would get blown out and Virginia would go back to GOP.

    “In the general election on November 7, 2017, Democratic nominee Ralph Northam defeated Republican nominee Ed Gillespie, winning by the largest margin for a Democrat since 1985. Northam became the 73rd governor of Virginia, and assumed office on January 13, 2018.[4] The election had the highest voter turnout percentage in a Virginia gubernatorial election in twenty years with over 47% of the state’s constituency casting their ballot.
    Northam Gillespie
    Popular vote 1,409,175 1,175,731
    Percentage 53.9% 45.0%

    Then we had the Blackface and baby-killer kerfuffles…

    so what does this tell us about Virginia politics because clearly and obviously – it’s Northam’s staff that is putting together these budgets and Northam is, as DJ opines a “suit”?

    So despite all the “baby killing”, “socialists”, “tax & spend ” rhetoric, Virginia has become “New Jersey” and other Northerm Democratic states – at least according to some in BR!

    But like New Jersey – Virginia is no more all “Blue” than the man in the moon:

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