Virginia Gubernatorial Candidate Tax Proposals

Being as the Virginia gubernatorial election is today, and we at the Tax 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 tax rate from 5.75 percent to 5 percent over 4 years
• Reduce corporate income tax from 6 to 4 percent
• Ensure government does not grow faster than inflation 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 These taxes on business capital, particularly the BPOL, aren’t sexy dinner table conversation, but they are outdated parts of the code that need to be reevaluated.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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