Being as the Virginia gubernatorial election is today, and we at the TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Foundation value keeping the citizenry informed, I thought I’d re-post a few of our findings from examining the tax plans of each of the gubernatorial candidates. From our report in July:
Terry McAuliffe (D)
- Give localities the option to reduce or eliminate the Business Professional Occupation Licensing (BPOL) tax, the Machinery and Tool tax, and the Merchants’ Capital tax
- Create task force to identify new revenue sources for localities with aim of maintaining local revenue
Ken Cuccinelli (R)
- Eliminate or reduce the BPOL, the Machine and Tool Tax, and the Merchants’ Capital Tax, while maintaining local revenue
- Reduce top individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. rate from 5.75 percent to 5 percent over 4 years
- Reduce corporate income taxA corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. from 6 to 4 percent
- Ensure government does not grow faster than inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. plus population growth
Robert Sarvis (L)
- Eliminate the BPOL, Machinery and Tool Tax, Merchants Capital Tax, and Car Tax
- Consider eliminating the individual income tax
- Consider reforming property taxes to land-value or two-rate tax
- Eliminate credits and deductions on remaining taxes
- Repeal Governor McDonnell’s transportation plan from 2013 session and move instead toward electronic tolling and congestion fees to fund transportation infrastructure
The good news here is that each of the candidates has identified Virginia’s local business tax code as an element that is ripe for reform. These taxes on business capital, particularly the BPOL, aren’t sexy dinner table conversation, but they are outdated parts of the code that need to be reevaluated. I encourage you to read the whole report to understand all the other facets of Virginia’s code that the gubernatorial field is looking at.
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