The Virginia House of Delegates passed Governor Glenn Youngkin’s bills to cut the business tax rate from six to five percent and the top individual income tax bracket from 5.75 to 5.5 percent. The two bills would also increase individual and business income tax deductions.
“Virginians are still overtaxed, they deserve to keep more of their hard-earned paychecks and today’s significant move by the House of Delegates means Virginians are one step closer to additional relief,” Governor Glenn Youngkin said in a release after the bills passed out of the House on Wednesday. “The reductions in individual income tax mean 86 percent of taxpaying Virginians will enjoy the benefits of a lower top tax rate and an additional 14,000 Virginians will pay no state income taxes. The reduction of tax rates for business will result in lower taxes for approximately 475,000 resident small business owners and local businesses across the Commonwealth.”
The bills will need Democrat support to pass out of the Senate; on Monday, House Democrats argued in favor of an alternate suite of tax relief more targeted at helping people with low- and moderate-incomes.
Where Youngkin’s HB 2319 increases the standard deduction for joint filers to $18,000, doubling what it was when he ran for office, Delegate Vivian Watts’ (D-Fairfax) proposal would have increased that to $20,000. It also would make the Earned Income Tax Credit fully refundable, and would have included $230 for “all taxpayers living paycheck to paycheck.”
She argued that Youngkin’s proposals would mostly benefit the wealthy.
“Quite frankly, our tax cuts value hard work over just the accumulation of wealth,” she said.
Delegate Joe McNamara (R-Roanoke), who carried Youngkin’s bills, argued in favor of the income tax cuts for the top bracket, affecting individuals earning more than $17,000.
“When you look at reducing the top tax bracket, which we did nothing towards reduction last year, we increase our competitiveness across the country,” he said, focusing on southern states that made similar changes.
“Virginia isn’t just in a competition for more jobs, we’re in a competition to retain our current residents and to attract others to our Commonwealth,” McNamara said in a House Republican press release Wednesday. “Americans are more mobile than ever, and if a family decides they can do better for themselves in another state, they will move, as recent Census data illustrates. These long-term tax changes will make Virginia a more attractive choice as people search for a place to live, work, and raise a family.”
“Today, the House took a major step forward in our long-term effort to ensure that our Commonwealth remains an economic leader for generations to come,” Speaker Todd Gilbert (R-Shenandoah) said in the release. “House Republicans want to put money back in taxpayers’ pockets, and that’s just a short-term benefit of these long-term improvements. By passing these two bills, we’re positioning Virginia for long-term economic growth.”
– – –
Eric Burk is a reporter at The Virginia Star and The Star News Network. Email tips to [email protected].
Photo “Glenn Youngkin” by Glenn Youngkin. Background Photo “Virginia State House” by Farragutful. CC BY-SA 4.0.