Thursday, January 22, 2009

Concerned About Tax Fairness? Support This Bill.

Whenever I mention the concept of increasing the gas tax to pay for public transportation, people inevitably accuse me of trying to raise taxes on low-income people. My response is twofold:
  1. Raising the gas tax affects low-income people less than you'd think. Most of them drive fuel-efficient cars or take public transportation. It hits people who drive gas guzzlers the hardest, and if you can afford a mammoth Canyonero SUV, you probably weren't sweating a few cents difference in the price of gas when you did.

  2. If you're so concerned about taxing the poor, why aren't you speaking out about Virginia's incredibly regressive tax on groceries?
Fortunately, Del. David Englin (D-Alexandria), Del. Joe Morrissey (D-Henrico), and Del. Dave Marsden (D-Fairfax) are working on the second point:
The Middle Class and Small Business Tax Relief Act will repeal the state sales tax on groceries, repeal the corporate income tax for businesses making less than $100,000 per year, and cut the personal income tax for Virginians making between $17,000 and $75,000 per year, all while protecting existing money that is dedicated to public education and transportation.

Eliminating the current 1.5 percent state sales tax on food will provide roughly $230 million per year of tax relief for 7.6 million Virginians in nearly 3 million households. Eliminating the corporate income tax on businesses making less than $100,000 per year will provide $10 million in tax relief to 22,000 businesses. Lowering the personal income tax rate to 5.6 percent for people making between $17,000 and $75,000 per year will provide $130 million in tax relief to more than 1.4 million Virginians. [...]

To accomplish that, the proposal would raise the income tax rate on people making more than $400,000 per year by 1.1 percent, affecting roughly 30,000 Virginians, or the wealthiest four-tenths of a percent of the state's population. Moreover, the legislation is written to ensure that there is no change in the amount or the timing of the current funds that go to local governments for public education and to the Transportation Trust Fund.
I don't usually stray into the realm of taxes on this blog, but I couldn't pass up the chance to talk about this great new bill. A tiny tax hike on the richest 0.4 percent to give a tax break to literally every other Virginian? Sounds good to me.

Virginia's GOP seems intent on blocking
any positive legislation this year, but here's hoping this is one bill that can pull a General Lee on the roadblock Republicans.
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