Open Letter to the Virginia General Assembly: Support The Second Largest Tax Cut in State History
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, I write to express our support for House Bill 2529 and Senate Bill 1372. These twin tax relief proposals will return nearly $1 billion back to the pockets of more than four million hardworking taxpayers across the commonwealth through many noteworthy reforms to the state tax code. While the reforms included in HB 2529 and SB 1372 are a notable improvement over the current structure, we still encourage you to continue to work toward the goal of comprehensive tax reform. In the meantime, we urge you to support HB 2529 and SB 1372 when they come before you.
As you are aware, federal tax reform greatly reduced the federal tax liability of most Virginians, however, many will inadvertently face a higher state tax burden due to non-conformity to federal tax code. It is estimated that taxpayers will pay an additional $600 million in tax this year and nearly $1 billion more by 2023, if you fail to address this issue. Some have maintained that the government should simply keep this extra revenue to fund new spending in the budget, but we strongly believe that would be the wrong approach. Every dime should be returned to taxpayers.
Enacting the reforms contained in HB 2529 and SB 1372 would immediately make the tax code fairer for taxpayers. As it stands, Virginia has a relatively low standard deduction of $3,000 and $6,000 for individual and joint filers, respectively. Thankfully, under SB 1372, the standard deduction would increase by 50 percent, to $4,500 and $9,000 for individual and joint filers, respectively. It also provides a one-time tax rebate of $110 for individuals and $220 for married couples in October 2019 and includes a subtraction modification for Global Intangible Low-taxed Income, or GILTI, meaning Virginia will abstain from taxing income earned abroad.
Adopting measures that lead to tax cuts for taxpayers is something every lawmaker should support. While these proposals do not deliver a complete overhaul of the tax code, including lower corporate and personal income tax rates, it is absolutely a step in the right direction. By voting in favor of the second largest tax cut in state history, you will make Virginia a better place to live and work. We strongly believe this package is worthy of your support and we hope you vote “YES” when the time comes.
Policy and Government Affairs Associate