The Thomas Jefferson Institute is a friend of the show and a necessary and important policy think tank in Virginia. This year, they are proposing a tax reform initiative that seems to be gaining momentum as we head into the General Assembly Session.
TJI notes that over the next two years, without any GA action, taxes on Virginians will increase by $1.2 billion and $4.5 billion in the next five. That’s nonsensical when we are trying to grow the state’s economy.
They suggest to double the standard deduction for the state’s income tax filing, which they state will benefit almost 70 percent of filers. Of course, this primarily helps those who don’t itemize, who mostly live outside the Northern Virginia/urban areas (also heavily represented in the legislature). They also propose cutting the corporate tax rate.
Endorsing the proposal are the National Federation of Independent Business (NFIB), Americans for Prosperity (AFP), Americans for Tax Reform (ATR), the Family Foundation, and Middle Resolution.
“Tax relief is needed and should be the top priority for the incoming General Assembly,” wrote Michael Thompson, president of the Jefferson Institute, when announcing the plan and its endorsements
Of course, the organization faces obstacles in getting the proposal passed. Since expanding enrollment eligibility for Medicaid this year, projections are that the state underestimated its obligations by about $500 million. There are also calls to increase spending in higher education and for public schools.